TIME THE FIXED ORDER QUANTITY SYSTEM
** REORDER QUANTITY (Q) LEAD TIME (L) MAXIMUM RATE OF USAGE WITHOUT STOCK-OUT Q Q STOCK LEVEL * REORDER LEVEL POINT (A) EXPECTED RATE OF USAGE (R) BUFFER STOCK LEVEL *ROL= Forecast over lead -time + buffer stock **ROQ can be determined by EOQ or Coverage Analysis
THE FIXED ORDER CYCLE SYSTEM *ORDER UP TO LEVEL ** REORDER QUANTITY Q1 STOCK LEVEL BUFFER STOCK LEVEL TIME Q2 Q2 Q3 Q3 LEAD TIME (L) LEAD TIME (L) REVIEW PERIOD (T) REVIEW PERIOD (T) Cover period ** REORDER QUANTITY *OL=Forecast of Demand in cover period + Buffer Stock **ROQ=Order Level-Effective Stock + Back Orders
Coverage Analysis The objective of coverage analysis is to identify the optimum ordering frequency for each product within a group to minimise the overall turnover stock capital investment.
Throughput Operating Costs Inventory Realistic Order Release Shorter Lead Times Smaller Lot Sizes Outsourcing Accurate Delivery Dates Responsive to Market Competitive Pricing Product Development Optimised Sequencing Dynamic Buffers High Resource Utilisation THE RIGHT BALANCE THEORY OF CONSTRAINTS
Manufacturer Supplier Region Warehouse Central Warehouse Sub Supplier Store Syncron SCP and eCollaboration Forecasting Replenishment Production plan POS data Forecast Stock level (safety stock) Replenishment plan Forecast Stock level (safety stock) Replenishment plan Forecast Replenishment plan Production planning Capacity/material need Forecast Replenishment plan Production planning Capacity need Material need Forecast Replenishment plan Production planning Capacity need Material need Integration