Explain in simplest way

a 7 \\, Both delivery time and daily usage for the period must be used to determine the DEI. Furthermore, it is advisable to include some additional quantity to serve as a safety factor, just in case the normal delivery is delayed or business volume is higher than expected in the coming period. For the example given, the calculations for DEI would be as follows: Daily usage X Number of days in delivery period = Normal usage Normal usage + Safety factor (50%) =DEI e 14 cans per week + 7 days = 2 cans per day 2 cans per day X 5 days in delivery period = 10 cans normal usage 10 cans normal usage + 50% safety factor =15 cans DEI This is known as the Reorder Point in the Perpetual Order Method fo Establishing Quantity Standard Perpetual Inventory Method 1. To ensure that quantity purchase are sufficient not excessive 2. To provide effective control on stored item for the future. The reorder point is quite simply the number of units to which the supply on hand should decrease before additional orders are placed. The Par Stock means simply the maximum quantity of a given item that should be on hand. This helps to . Storage space . Limits on total value of inventory . Desired frequency of ordering . Usage . Purveyors' minimum order requirements un Whe