Reorder Point and Target Level
The system based on the information level assumes that an order is placed at a time when the level of available stock is lower than or equal to the so-called information level (ROP or Reorder Point). Available stock is understood as stock amount increased by already placed orders and decreased by products available or allocated […]
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Quantitative reasoning based on the demand history of a good is necessarily linked to the statistical analysis of the data. In this paper, the analysis of historical demand data has been carried out with the use of measures such as: the percentile and the quartile, measures of central tendency, measures of dispersion. A given set of […]
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Another extremely useful tool for inventory management is ABC analysis. It is based on a regularity observed in the 19th century by the Italian scientist Vilfredo Pareto. His research has shown that 80% of the national wealth in Italy is owned by 20% of families [Maternowska 2000a]. This regularity, called the Pareto principle, is applied...
Explore moreEconomic Order Quantity
In the system based on the information level, it was assumed that the size of the ordered lot was constant. It was also pointed out that an undoubted advantage of this method is the possibility of placing orders in the amount that minimizes the total costs of replenishment and storage of stocks. In the literature […]
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