{"id":7818,"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\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-levels\/"},"modified":"2023-01-19T01:00:55","modified_gmt":"2023-01-19T01:00:55","slug":"22030-10-5-7-example-for-calculation-of-requisitioning-objective-levels","status":"publish","type":"dom","link":"https:\/\/www.cdcr.ca.gov\/operations-manual\/dom\/chapter-2-fiscal-management\/article-12-materials-management\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-levels\/","title":{"rendered":"22030.10.5.7 Example for Calculation of Requisitioning Objective 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>An example of the R\/O method follows:<\/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: 720 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>Ordering 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: 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>Safety level: 15 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>Step 1 &#8211; convert yearly demand into issues per day. Issues per day = 720 items \u00f7 365 = 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 number of items used during the ordering and shipping time. Number of items = ordering and shipping time (in days) x issues per day = 60 x 2 = 120 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>Step 3 &#8211; calculate the number of items required for the operating level. Number of items = operating level (in days) x issues per day = 60 x 2 = 120 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>Step 4 &#8211; calculate the number of items required for the safety level. Number of items = safety level (in days) x issues per day = 15 x 2 = 30 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>Step 5 &#8211; calculate the R\/O. R\/O = number of items for the ordering and shipping time + number of items for operating + number of items for safety level = 120 + 120 + 30 = 270 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>Step 6 &#8211; calculate the reorder point (ROP). ROP = number of items for ordering and shipping time + number of items for safety level = 120 + 30 = 150 items (When stock on hand is depleted to 150 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 7 &#8211; calculate the quantity to be ordered. Order quantity = R\/O &#8211; RPO = 270 &#8211; 150 = 120 items (When a replenishment order is prepared, the quantity ordered is 120 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>This is a minimum guideline. Such things as minimum order quantities from supply sources (e.g., contract vendors) may require that an order be issued for more than the difference between the R\/O and ROP. Use your own judgment ordering more items delays the need to reorder the next time but increases the amount of inventory investment to more than is required.<\/p>\n\t\t\t\t\t<\/li>\n\t\n\t<\/ul>\n\t","protected":false},"parent":7766,"template":"","class_list":["post-7818","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>22030.10.5.7 Example for Calculation of Requisitioning Objective 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=\"22030.10.5.7 Example for Calculation of Requisitioning Objective 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\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-levels\/\" \/>\n<meta property=\"og:site_name\" content=\"Department Operations Manual (DOM)\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-19T01:00:55+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\\\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-levels\\\/\",\"url\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-levels\\\/\",\"name\":\"22030.10.5.7 Example for Calculation of Requisitioning Objective Levels - Department Operations Manual (DOM)\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/#website\"},\"datePublished\":\"2020-03-31T16:23:58+00:00\",\"dateModified\":\"2023-01-19T01:00:55+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-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\\\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-levels\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.cdcr.ca.gov\\\/operations-manual\\\/dom\\\/chapter-2-fiscal-management\\\/article-12-materials-management\\\/22030-10-5-7-example-for-calculation-of-requisitioning-objective-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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