Determining the time to order - Determining the optimal time to order is the next task that must be solved before placing an order. The optimal time to order is the day on which an order must be made at the latest if there are no delays in production or in the delivery of goods. In order to determine the latest order date, two parameters must be specified:
The reorder level (order stock) is the quantity of goods which must be reported to the purchasing department. It is calculated from the average amount consumed per time unit (working day, week) multiplied by the procurement time in time units. The
Mindestlagerbestand (iron stock); der je Ware mengenmäßig festzulegen ist, um eventuelle Überschreitungen der Lieferzeit oder Mehrverbrauch kurzfristig auszugleichen.
General formula for calculating the reorder point:
(Daily turnover * procurement time) + iron inventory = reorder point