Examples of Replenishment Orders for Different Policy Types

Min-Max Planning

The following is how a replenishment order is calculated for the min-max policy type:

When the Beginning Inventory Position measure (the sum of the Projected Available Balance and On Order measures) equals or falls below the minimum quantity, a replenishment order is triggered.
The quantity of the replenishment order is what's required to bring the inventory up to the maximum quantity (provided by Maximum Quantity - Beginning Inventory Position).

Consider the example in the following table:

Measure	Day 1	Day 2	Day 3	Day 4	Day 5	Day 6	Day 7	Day 8	Day 9	Day 10	Day 11	Day 12
Total Demand	10	15	5	15	20	10	15	10	20	15	10	10
Final Minimum Quantity	50	50	50	50	50	50	50	50	50	50	50	50
Final Maximum Quantity	100	100	100	100	100	100	100	100	100	100	100	100
On Hand	25	0	0	0	0	0	0	0	0	0	0	0
Purchase Orders	0	10	0	0	0	0	0	0	0	0	0	0
Total Supply	25	10	0	75	0	0	0	55	0	0	0	55
Projected Available Balance	15	10	5	65	45	35	20	65	45	30	20	65
On Order	10	75	75	0	0	55	55	0	0	55	55	0
Beginning Inventory Position	25	85	80	65	45	90	75	65	45	85	75	65
Planned Replenishments by Order Date	75	0	0	0	55	0	0	0	55	0	0	0
Planned Replenishments by Due Date	0	0	0	75	0	0	0	55	0	0	0	55
Final Inventory Position	100	85	80	65	100	90	75	65	100	85	75	65

The Beginning Inventory Position measure is evaluated every day. On Day 1, the Beginning Inventory Position measure is 25 units, which is less than the Final Minimum Quantity measure of 50 units. Therefore, a replenishment order of 75 units is created (Final Maximum Quantity - Beginning Inventory Position). The order date is Day 1, and the item lead time is 3 days. Therefore, the Planned Replenishments by Due Date measure is updated for Day 4, while the On Order measure reflects 75 units on Days 2 and 3. On Day 4, the order is received in the inventory, and the Total Supply measure is updated.

The sequence is repeated on Days 5 and 9.

Fixed Order Cycle

The following is how a replenishment order is calculated for the fixed order cycle policy type:

The replenishment orders are placed on only the open days defined in the associated fixed order cycle calendar.
When the Beginning Inventory Position measure (the sum of the Projected Available Balance and On Order measures) falls below the maximum quantity, a replenishment order is triggered.
The quantity of the replenishment order is what's required to bring the inventory up to the maximum quantity (provided by Maximum Quantity - Beginning Inventory Position).

Consider the example in the following table:

Measure	Day 1	Day 2	Day 3	Day 4	Day 5	Day 6	Day 7	Day 8	Day 9	Day 10	Day 11	Day 12
Total Demand	10	15	5	15	20	10	15	10	20	15	10	10
Final Maximum Quantity	100	100	100	100	100	100	100	100	100	100	100	100
On Hand	25	0	0	0	0	0	0	0	0	0	0	0
Purchase Orders	0	10	0	0	0	0	0	0	0	0	0	0
Total Supply	25	10	0	75	0	0	0	0	0	0	90	0
Projected Available Balance	15	10	5	65	45	35	20	10	- 10	-25	55	45
On Order	10	75	75	0	0	0	0	0	90	90	0	0
Beginning Inventory Position	25	85	80	65	45	35	20	10	80	65	55	45
Planned Replenishments by Order Date	75	0	0	0	0	0	0	90	0	0	0	0
Planned Replenishments by Due Date	0	0	0	75	0	0	0	0	0	0	90	0
Final Inventory Position	100	85	80	65	45	35	20	100	80	65	55	45

The associated fixed order cycle calendar is open on only Days 1 and 8.

On Day 1, the Beginning Inventory Position measure is 25 units, which is less than the Final Maximum Quantity measure of 100 units. Therefore, a replenishment order of 75 units is placed (Final Maximum Quantity - Beginning Inventory Position). The order date is Day 1, and the item lead time is 3 days. Therefore, the Planned Replenishments by Due Date measure is updated for Day 4, while the On Order measure reflects 75 units on Days 2 and 3. On Day 4, the order is received in the inventory, and the Total Supply measure is updated.

The sequence is repeated on Day 8.

ROP and Order Quantity

The following is how a replenishment order is calculated for the reorder point (ROP) and order quantity policy type:

When Beginning Inventory Position measure (the sum of the Projected Available Balance and On Order measures) equals or falls below the ROP, a replenishment order is triggered.
The quantity of the replenishment order is the order quantity.
If the fixed order quantity isn't defined in the Items table or the default order quantity isn't defined at the segment level in the policy assignment set, replenishment orders are created to bring the inventory to the ROP level.

Consider the example in the following table:

Measure	Day 1	Day 2	Day 3	Day 4	Day 5	Day 6	Day 7	Day 8	Day 9	Day 10	Day 11	Day 12
Total Demand	10	15	5	15	20	10	15	10	40	15	10	10
Final ROP Quantity	50	50	50	50	50	50	50	50	50	50	50	50
On Hand	25	0	0	0	0	0	0	0	0	0	0	0
Purchase Orders	0	10	0	0	0	0	0	0	0	0	0	0
Total Supply	25	10	0	75	0	0	0	75	0	0	0	75
Projected Available Balance	15	10	5	65	45	35	20	85	45	30	20	85
On Order	10	75	75	0	0	75	75	0	0	75	75	0
Beginning Inventory Position	25	85	80	65	45	110	95	85	45	105	95	85
Planned Replenishments by Order Date	75	0	0	0	75	0	0	0	75	0	0	0
Planned Replenishments by Due Date	0	0	0	75	0	0	0	75	0	0	0	75
Final Inventory Position	100	85	80	65	120	110	95	85	120	105	95	85

The order quantity is 75 units, and the Beginning Inventory Position measure is evaluated every day.

On Day 1, the Beginning Inventory Position measure is 25 units, which is less than the Final ROP Quantity measure of 50 units. Therefore, a replenishment order of 75 units (the order quantity) is placed. The order date is Day 1, and the item lead time is 3 days. Therefore, the Planned Replenishments by Due Date measure is updated for Day 4, while the On Order measure reflects 75 units on Days 2 and 3. On Day 4, the order is received in the inventory, and the Total Supply measure is updated.

The sequence is repeated on Days 5 and 9.

ROP and EOQ

The following is how a replenishment order is calculated for the ROP and economic order quantity (EOQ) policy type:

When the Beginning Inventory Position measure (the sum of the Projected Available Balance and On Order measures) equals or falls below the ROP, a replenishment order is triggered.
The quantity of the replenishment order is the EOQ.
If the EOQ can't be calculated at the item-location level or the default EOQ isn't defined at the segment level in the policy assignment set, replenishment orders are created to bring the inventory to the ROP level.

Consider the example in the following table:

Measure	Day 1	Day 2	Day 3	Day 4	Day 5	Day 6	Day 7	Day 8	Day 9	Day 10	Day 11	Day 12
Total Demand	10	15	5	15	20	10	15	10	40	15	10	10
Final ROP Quantity	50	50	50	50	50	50	50	50	50	50	50	50
On Hand	25	0	0	0	0	0	0	0	0	0	0	0
Purchase Orders	0	10	0	0	0	0	0	0	0	0	0	0
Total Supply	25	10	0	75	0	0	0	75	0	0	0	75
Projected Available Balance	15	10	5	65	45	35	20	85	45	30	20	85
On Order	10	75	75	0	0	75	75	0	0	75	75	0
Beginning Inventory Position	25	85	80	65	45	110	95	85	45	105	95	85
Planned Replenishments by Order Date	75	0	0	0	75	0	0	0	75	0	0	0
Planned Replenishments by Due Date	0	0	0	75	0	0	0	75	0	0	0	75
Final Inventory Position	100	85	80	65	120	110	95	85	120	105	95	85

The EOQ is 75 units, and the Beginning Inventory Position measure is evaluated every day.

On Day 1, the Beginning Inventory Position measure is 25 units, which is less than the Final ROP Quantity measure of 50 units. Therefore, a replenishment order of 75 units (the EOQ) is placed. The order date is Day 1, and the item lead time is 3 days. Therefore, the Planned Replenishments by Due Date measure is updated for Day 4, while the On Order measure reflects 75 units on Days 2 and 3. On Day 4, the order is received in the inventory, and the Total Supply measure is updated.

The sequence is repeated on Days 5 and 9.