According to the definition of (R, Q) inventory policies, a replenishment order with size Q will not be placed towards its supplier until the inventory position, expressed as the physical inventory plus the stock on order minus backorders, of one stock point is equal to or drops below its
reorder point R [7].
The plan was to build the ANAs confidence in the system and prepare the ANA to receive the Warlord push by constructing warehouse bin locations and teaching the concepts of stock control management, including the use of minimum and maximum
reorder points.
The
reorder point is the level of stock implemented into information system of a company that alerts company to place an order.
Where, r = the
reorder point, d = the daily demand, and L = the lead time; in this case the number of days of lead time
9 Expected demand during delivery time Safety stock
Reorder point Meat (kg) (kg) (kg) Lamb 248.
When this drops below a certain point--either the
reorder point or minimum (MIN)--a planned order is triggered.
For that reason, Supply Chain Solutions relies heavily on information technology, like its warehouse management system (WMS) to direct associates on the floor and monitor inventory levels for
reorder points (Provia Software, 877-776-8421, www.
Case 2: When the on-hand inventory quantity at a warehouse reaches its
reorder point, the stock level at other regional warehouse is checked.
Establishing number schemes,
reorder points, vendor cross references, and alternate part numbers takes considerable effort.
This eliminated the need to transmit the entire database of some 9,000 item inventories and
reorder points to each store every day.
The basic reason for these increases in demand fluctuation is that the classical approach to regular replenishment of the stocks at the different levels of a distribution chain optimizes each level separately, mostly by using
reorder point systems.
Whenever the inventory level for a certain item reached the
reorder point, the system generated a report alerting management to reorder the item.
