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Reorder Analysis
How do I know if I need to reorder?
The reorder point
The reorder point, also called minimum stocking quantity, is the point when the minimum stock level for an inventoried item is reached and a purchase order should be issued to reorder the item.
In other words, when you need to reorder a product to avoid running out of the item.
Which leads to three questions:
- How do you know which products are near the reorder point?
- When do they need to be reordered?
- What quantities need reordered?
Which products?
Determining which products need reordered requires accurate inventory counts, the ability to predict future buying and production needs and then preferably, the capability to establish a minimum order amounts in the inventory system for each product and be alerted when the reorder point is reached.
When & how many?
There is obviously an amount of time between the time an order is placed and the time when it arrives. Vendor history and performance criteria should be analyzed and combined with the lead time/safety lead time to determine when an order should be placed.
- Lead time: the time (days) between a purchase order being issued and the receipt of goods into inventory
- Safety lead time: the process of placing a replenishment order with buffer time included to accommodate for unexpected customer orders or problems
- Quantity allocated: inventory that has been allocated to a specific use or a customer
- Safety stock: inventory that is a buffer for problems with vendor shipments, unexpected customer orders or damaged goods
- Quantity in transit: inventory that has been ordered and is en route or in transit
Reordering simplified with ACCTivate!
ACCTivate! was created to simplify the reorder process with the tools and functionality to proactively monitor conditions and make recommendations as how to proceed.
The three questions are easily addressed with ACCTivate!’s demand analysis tools, alerts & reorder function.
Analyze Demand
- Analyze buying trends to better predict future buying and production needs for products
- Easily establish reorder points (minimum stocking quantity) for each product based on anticipated demand and lead time
Receive Alerts
- When the inventory of a product drops to the reorder point, an business alert will be raised as a warning that you are low on stock
- From the alert, purchase orders can be automatically generated based on inventory requirements (i.e. stocking levels) using the Reorder Function.
Reorder
- ACCTivate! recommends items to be purchased based on established stocking levels and primary suppliers
- You evaluate vendor options and quantity for each product to be purchased and edit as needed
- For each vendor, ACCTivate! tracks the total of all items to be purchased as selections are made.
- A simple push of the button creates a consolidated purchase order for each vendor
Learn more
ACCTivate! is easy to use and enables small and mid-sized companies to gain control of inventory, manage their entire business, and delight customers - all at an affordable price.
Contact us or give us a call at 866-877-1311 to talk about your needs with an inventory specialist today.
