The irregularity of removing quantities from a definite picking location in a warehouse very often results in the stock out in the particular picking address. In practice, the Red Card principle is used to determine a critical level for each picking location when it is necessary to start the replenishment of stock in the picking address. The question is how to calculate an adequate critical level. The guidelines in this paper explain in detail the solution of the problem using the Min/Max stock control method and mathematical algorithms adjusted by authors. In order to check the validity of these mathematical algorithms of the Min/Max method, the simulation modelling has been also done and presented.