This is what happens in the video
The reordering policy called Order in Microsoft Dynamics 365 Business Central creates one supply order for every demand. It does not pool demands together, so if you have three separate demands, the planning engine generates three separate supply orders.
You set the reordering policy on the Planning tab of the item card.
The supply order is planned backwards from the demand date. The order becomes available the day before the due date of the demand that triggered it.
The supply type depends on the item. A production item creates a production order, but the same logic applies to purchase orders and transfer orders.
If you have two demands on the same day, the Order policy still creates two separate orders rather than combining them.
Where to set the reordering policy in Business Central
You find the reordering policy on the Planning tab of the item card. Here you can select the reordering policy called Order. This tells the planning engine to plan the item with one demand and one supply, so each demand is matched directly to its own supply.
How the Order reordering policy suggests new orders
Start with the present-day situation. The item may have inventory, or it may not. With a reordering policy of Order, you often don’t keep an inventory level, but you can have one. A starting inventory could be a form of safety stock.
From the starting date, the planning engine runs forward in time and looks at the demands ahead. Say you have three demands. Each demand triggers its own supply, and the supplies are not put together because the policy is Order.
Each time a demand is triggered, the system creates a planned order, planned backwards. In the example here it’s a production order because the item is a production item, but it could just as well be a purchase order or a transfer order.
The order’s lead time is planned backwards so the goods are available the day before the due date of the demand that triggered them. The inventory level moves accordingly: it starts at the safety stock level and is topped up by each triggered order to cover the matching demand.
How order size and lead time affect planning
If it’s a production order with different order sizes, the lead time will be different for each order. This is worth keeping in mind, because the backward planning is based on the lead time of each individual order.
Even when two demands fall on the same day, the Order policy creates two separate orders. It does not merge them into one. That’s the defining characteristic of this policy: one supply for one demand.
Q&A
What does the Order reordering policy do in Business Central?
It creates one supply order for every demand. Each demand triggers its own supply, and the supplies are never combined, even if multiple demands fall on the same day.
Where do you set the reordering policy on an item?
You set it on the Planning tab of the item card, where you can select the reordering policy called Order.
When is a supply order created with the Order policy available?
The supply order is planned backwards from the demand date and becomes available the day before the due date of the demand that triggered it.
What type of supply order does the Order policy create?
It depends on the item. A production item creates a production order, while other items can create a purchase order or a transfer order.
Does the Order policy combine demands that fall on the same day?
No. If you have two demands on the same day, the policy creates two separate orders rather than pooling them into one.