Reorder Planning method

[qamer.financial]

Dear All,

Can any body explain me about Reorder Planning Method ?
How it works?

[bakerkha]

Dear,

Reorder point planning uses demand forecasts to decide when to order a new quantity to avoid dipping into safety stock. Reorder point planning suggests a new order for an item when the available quantity--on-hand quantity plus planned receipts--drops below the item's safety stock level plus forecast demand for the item during its replenishment lead time. The suggested order quantity is an economic order quantity that minimizes the total cost of ordering and carrying inventory. Oracle Inventory can automatically generate requisitions to inform your purchasing department that a replenishment order is required to supply your organization.

Reorder Point=Safety Stock+forecast demand during leadtime

Order lead time is the total of the item's processing, preprocessing, and postprocessing lead times.

Baker Abdullah

[qamer.financial]

Assalam alai kum bakerkha
dear thank you very much for posting a good informative

now i understood about reorder planning but about forecast can u explain?

[bakerkha]

Assalam Alaikom,

Forecaste demand means the demand that is expected during the lead time. e.g. if you order 50 units it will take 5 days to be delivered. during these 5 days, as per your expectaions, you will issue 10 units so you have to add these 10 units to the ordered quantity so that the stock will not fall down the safety stock.

Regards

[qamer.financial]

Walekum Salam dear

Thank you very much for a nice information.