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Assuming no safety stock, what is the reorder point (R) given an average daily demand of 100 units and a lead time of 5 days?

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تم إضافة السؤال من قبل Prabin Rai , inventory officer , bijaya motor
تاريخ النشر: 2017/05/22
Moustafa Abouelsaad
من قبل Moustafa Abouelsaad , Procurement & Logistics Director , Al-Kharafi Construction, Kuwait

Dear Prabin,

Reorder point = Average daily demand x lead-time in days

100 x 5 = 500 units

However you should also consider the following factors before ordering:

 

  • Is there a minimum order quantity for the needed units?
  • Is it a seasonal product?
  • Is your Purchasing budget enough for the needed units?

Arif Mahmood
من قبل Arif Mahmood , Procurement Manager / Supply Chain Manager , Safety Assets Establishment for Trading & Contracting, www.safetyassets.net

 

Thanks for the invitation.

Your re-ordering point will be calculated by knowing your average daily consumption and the time required to refill the inventory.

Therefore,

Re-Ordering Point = Average daily requirement X Lead Time in days.

ROP = X = Units.

 

 We aso have to keep in consideration other factors as mentioned by Mr. Mostafa Abouelsaad. I agree with his answer. 

Nadeem Asghar
من قبل Nadeem Asghar , Supply Chain Consultant/Trainer , Independent Practitioner

I fully agree with the reply given by  Mostafa Abouelsaad.

Almas Kalimurzin
من قبل Almas Kalimurzin , Commercial Director , BioOperations. Bioethanol Production Plant

R=Daily Demand ×Lead Time (in days)

R=100×5=500 units.

Also there are several factors need to be considered as seasonal demand, safety stock. 

Arno Taljaard
من قبل Arno Taljaard , Logistics Manager , Lumotech (Pty) Ltd

The reorder point would be when the stock on hand is 500 pieces. Ideally you would set this supply up so that a delivery of 100 pieces is received daily, ordered on the 5-day lead time.

Mohammed Awad
من قبل Mohammed Awad , Regional Supply Chain & Operations Director , Tamakkon Co.

Every 5 days you will need to reorder. 

nawfal zouaoui
من قبل nawfal zouaoui , Chef Département Achats et Logistique , Locamed Services

I totally confirm Mr  Mostafa Abouelsaad Answer's.

Reda Sabry
من قبل Reda Sabry , Sr.Procurement Officer , Gulf Human Resources Development ( ADNOC Refining)

Reorder point = Average daily demand x lead-time in days

100 x 5 = 500 units

Every 5 days

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