fixed interval reorder system

(redirected from reorder point system)

fixed interval reorder system

or

reorder point system

an arrangement whereby STOCK is reordered at regular intervals in variable quantities. In determining the amount to be reordered, account must be taken of usage rate of stock during the interval between placing the order and delivery of the ordered material. Usage during the reorder period should serve to reduce stock to a minimum safety stock level, before then being restored to the planned maximum stock level. With such a periodic review system the stock position is monitored at predetermined intervals and orders placed to bring the stock position up to a target level. See STOCK CONTROL, STOCKHOLDING COSTS.
References in periodicals archive ?
Compared to the widespread reorder point system, the pulse system has several substantial advantages.
Compared to a classical reorder point system, the "pulse" required less inventory, especially if both levels of demand and demand and supply uncertainty were high, and delivery times and order cycles long.
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.
The reorder point system requires basic data that includes inventory status (usually updated daily) and quantities on order (either from a supplier or produced in-house).
Overall, perishable tooling requires more careful planning and control than is possible with a simple reorder point system.