The basis of the reorder point planning is the comparison of the available MRP stock (total from plant stock and the fixed receipts) with the reorder point. If the available stock is less than the reorder point, then procurement is triggered.
In reorder point planning, as a rule, only the shortfall of the reorder point causes a planning file entry during reorder point planning, and this then triggers net requirements calculation. To avoid over-planning, sales orders, dependent requirements, reservations, and so on, are not generally included in the net requirements calculation, as these future requirements have already been scheduled with the reorder point.
The reorder point should cover the expected average material requirements during the replenishment lead time.
The safety stock should cover both excess material consumption during the replenishment lead time, and the additional consumption caused by delayed deliveries. The safety stock is part of the reorder point.

Learn more about reorder point in this training document.

No related posts.