What is order point technology?

The order point method is also called the safety stock method. The time from issuing an order to receiving the ordered goods is called the order lead time of the order point method.

The order point method itself has some limitations. For example, although the inventory of a certain material has been reduced to the order point, the enterprise may not receive any new orders in the near future, so there is no new demand in the near future, and replenishment can be temporarily ignored. Therefore, the order point method will also cause some more inventory backlog and capital occupation.

Method characteristics

The characteristics of this method are: it is assumed that the order lead time t and p (that is, the market supply and shipping conditions) are unchanged (that is, t? P is a constant), the batch size of each order is equal, and the ordering time changes with the time when the material inventory drops to the ordering point. Therefore, in the case of unbalanced material consumption speed in production, people can be sent to order points to adapt to the change of material consumption speed and maintain the rationality of material reserve.

Specific practice

Mark the order lead time tp on the material card and account page, check the actual inventory qa of each order point (day), and calculate the difference between QP and QA. If it is+Δ q, sort by q+Δ q; If it is -q, order according to Q-Δ Q, so that after adjusting the order quantity, the phenomenon of shortage or overstock can be prevented.