Fixed reorder quantity

Fixed reorder quantity inventory model—A form of independent demand item management model in which an order for a fixed quantity, Q, is placed whenever stock on hand plus on order reaches a predetermined reorder level, R. The fixed order quantity Q may be determined by the economic order quantity, by a fixed order quantity (such as a carton or a truckload), or by another model yielding a fixed result. The reorder point R, may be deterministic or stochastic, and in either instance is large enough to cover the maximum expected demand during the replenishment lead time. Fixed reorder quantity models assume the existence of some form of a perpetual inventory record or some form of physical tracking, e.g., a two-bin system, that is able to determine when the reorder point is reached. These reorder systems are sometimes called fixed order quantity systems, lot-size systems, or order point-order quantity systems. 

Another decision associated with linkages is the quantity-timing decision for replenishment along the chain. This decision includes the rules by which partners will order and deliver stock along the supply chain. The first option is constant quantity, or fixed reorder quantity. With the constant quantity decision, the same quantity is produced or requested... 

Fixed reorder cycle inventory model—A form of independent demand management model in which an order is placed every n time units. The order quantity is variable and essentially replaces the items consumed during the current time period. Let M be the maximum inventory desired at any time, and let x be the quantity on hand at the... 

We model the supply decisions faced by a catalog retailer for a product with random demand over a sales season of fixed length. The retailer must determine an initial order Qi available at the start of the sales season. At a fixed time t during the season, the retailer updates the demand forecast based on observed sales and places a reorder quantity Q2 that arrives after a fixed lead-time L at time t + L. 

The most commonly employed method of inventory control is the visual inspection method. This method requires the pharmacist, or other designated personnel, to visually inspect the number of items remaining on a shelf. From this number, the person then determines whether there is adequate inventory or whether an order should be placed. The person may use the ROP and EOQ to help determine whether an order should be placed and the quantity of fhe order. This is a fixed-quantity reorder system, in which the date of reordering varies but the quantity remains the same. 

Often, the manager sets up a periodic inspection schedule to aid in inventory control. In this modified visual inspection, the inventory manager routinely inspects designated inventory levels, e.g., on a daily or weekly basis, to determine whether an order should be placed. This routine examination of inventory minimizes the potential for stockouts and can potentially improve inventory control. This is a fixed-time reorder system, in which the quantity ordered might vary but the date of ordering remains the same. This is ideal for small to medium businesses for whom a prime vendor is the main supply source and the true volume of activity can be determined easily. 

Often it is the economics implicit in the FOQ equation, or a similar thought process, that governs decisions such as those made by production control and transportation managers up and down the supply chain. The company selling to the final customer orders material in fixed amounts from suppliers according to reorder points and minimum order quantities. Others back up the chain duplicate the behavior, leading to a supply chain bloated with extra inventory and operating expense. 

Constant-quantity (fixed-quantity) reorder model... 

An inventory reorder pattern with fixed quantities and the... 

Variable costing is more valid in making decisions related to make or buy, economic order quantities, and other decisions. Supply chain design may transform variable into fixed costs. For example, a milk run will be made regardless of a decision to replenish any single SKU. Therefore, the reorder cost (including transportation) assumption related to the decision should be reduced accordingly. 

---