{"id":7815,"date":"2020-03-31T09:23:58","date_gmt":"2020-03-31T16:23:58","guid":{"rendered":"http:\/\/cdcr.test\/dom\/chapter-2-fiscal-management\/article-12-materials-management\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\/"},"modified":"2023-01-19T00:59:38","modified_gmt":"2023-01-19T00:59:38","slug":"22030-10-5-4-contract-example-for-calculation-of-min-max-levels","status":"publish","type":"dom","link":"https:\/\/www.cdcr.ca.gov\/operations-manual\/dom\/chapter-2-fiscal-management\/article-12-materials-management\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\/","title":{"rendered":"22030.10.5.4 Contract Example for Calculation of Min\/Max Levels"},"content":{"rendered":"\t<ul class=\"cdcr-dom-group-block\">\n\t\t\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Example using guidelines for min\/max levels for items purchased from contract:<\/p>\n\t\t\t\t\n\t<ul class=\"cdcr-dom-group-block\">\n\t\t\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Yearly demand: 72 items.<\/p>\n\t\t\t\t\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Order and shipping time: 60 days.<\/p>\n\t\t\t\t\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Operating level: 90 days.<\/p>\n\t\t\t\t\t<\/li>\n\t\n\t<\/ul>\n\t\n\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Method 1 <\/p>\n\t\t\t\t\n\t<ul class=\"cdcr-dom-group-block\">\n\t\t\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Step 1 &#8211; convert yearly demand into issues per day. Issues per day = 72 items (yearly demand) \u00f7 365 days = .2.<\/p>\n\t\t\t\t\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Step 2 &#8211; calculate the minimum level. Minimum = ordering and shipping time (in days) x issues\/days = 60 x .2 = 12 items (When the stock on hand is depleted to 12 items, a replenishment order is prepared).<\/p>\n\t\t\t\t\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Step 3 &#8211; calculate the maximum level. Maximum = operating level (in days) x issues\/days = 90 x .2 = 18 items.<\/p>\n\t\t\t\t\t<\/li>\n\t\n\t<\/ul>\n\t\n\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Method 2 <\/p>\n\t\t\t\t\n\t<ul class=\"cdcr-dom-group-block\">\n\t\t\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Step 1 &#8211; determine the division factor. (See chart for prior example of Method 2.) Minimum = 6 (for ordering and shipping time of 60 days). Maximum = 4 (for operating level of 90 days).<\/p>\n\t\t\t\t\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Step 2 &#8211; calculate the minimum level. Minimum = yearly demand \u00f7 division factor for ordering and shipping time = 72 \u00f7 6 = 12 items (When stock on hand is depleted to 12 items, a replenishment order is prepared).<\/p>\n\t\t\t\t\t<\/li>\n\t\n\n\t<li class=\"cdcr-dom-item-block\">\n\t\t\t\t\t<p>Step 3 &#8211; calculate the maximum level. Maximum = yearly demand \u00f7 division factor for operating level = 72 \u00f7 4 = 18 items (When a replenishment order is prepared, the quantity to order is 18 items).<\/p>\n\t\t\t\t\t<\/li>\n\t\n\t<\/ul>\n\t\n\t<\/li>\n\t\n\t<\/ul>\n\t","protected":false},"parent":7766,"template":"","class_list":["post-7815","dom","type-dom","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>22030.10.5.4 Contract Example for Calculation of Min\/Max Levels - Department Operations Manual (DOM)<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"22030.10.5.4 Contract Example for Calculation of Min\/Max Levels - Department Operations Manual (DOM)\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.cdcr.ca.gov\/operations-manual\/dom\/chapter-2-fiscal-management\/article-12-materials-management\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\/\" \/>\n<meta property=\"og:site_name\" content=\"Department Operations Manual (DOM)\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-19T00:59:38+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\\\/\",\"url\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\\\/\",\"name\":\"22030.10.5.4 Contract Example for Calculation of Min\\\/Max Levels - Department Operations Manual (DOM)\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/#website\"},\"datePublished\":\"2020-03-31T16:23:58+00:00\",\"dateModified\":\"2023-01-19T00:59:38+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-4-contract-example-for-calculation-of-min-max-levels\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"DOM\",\"item\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Chapter 2 &#8211; 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