Overview

run-out time


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Quick Reference

The time that will elapse before an item in stock runs out. The concept is essential for scheduling the reordering of a range of goods. The run-out time for a product i is defined as:

ri = li/di,

where ri is run-out time in weeks, li is units in stock, and di is demand in units per week.

The table above gives a number of examples.

product

current stock (units)

demand rate (units/week)

run-out time (weeks)

A

1000

200

5

B

500

150

3.3

C

2000

500

4

D

600

300

2

Run-out time. The run-out times of four products as calculated from current stock levels and demand rates

Subjects: Business and Management.


Reference entries

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