How does a reorder policy fixed order quantity work in Business Central?
Let’s take a short look at the reorder policy fixed order quantity and how that works.
This is what happens in the video
If I’m entering an item card in Business Central.
On the planning tap, I could suggest fixed reorder quantity like this and if I have fixed reorder quantity, I could add here a reorder point, reorder quantity, and I have my safety stock for instance here, I could set a reorder point being 50 and reorder quantity being 100 and the safety stock being five as an example.
Let’s see how it works if we draw it.
So if the bolded line is the inventory level starting with whatever inventory quantity and this withdraw the inventory meaning every time there is a demand, we’ll pick a little from the inventory.
We have a withdraw and when we trigger the reorder point, it will create a forward planned order, production order if it’s a production item, of course, purchase order if it’s purchase items, Etc.
And after the lead time, the order will -the quantity will get to stock and fulfill my inventory with my order quantity. So the reorder quantity and that’s the same quantity every time but now I used fixed reorder quantity.
And likewise again, when it withdraw, there’s a trigger, it calculate forward and in the last example, it triggers and it normally would calculate forward but within that period it actually triggers on the safety stock and therefore it calculates backward and again, order start earlier.
So it will be a backward planned order with the order quantity and therefore it hits the inventory early, of course. So this is what we normally do with simple items or items with expectable withdraw and continuous withdraw