Explanation:

it is the point at which if stock of a particular material in store approaches, the shopkeeper should initiate the purchase requisition for fresh supplies of that material. this level is  fixed between the minimum and maximum level in such a way that the difference of quantity of the material between the re-ordering level and the minimum level will be sufficient to meet the requirements of production upto the time the fresh supply of the material is received.

re-order level= Maximum Usage * Maximum Lead Time