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
The fixed reorder quantity policy in Business Central reorders the same fixed quantity every time your inventory drops to the reorder point. You set a reorder point, a reorder quantity, and a safety stock on the item card, and the system creates a planned order whenever the reorder point is triggered.
You configure the fixed reorder quantity policy on the Planning tab of the item card. There you enter the reorder point, the reorder quantity, and the safety stock.
The system normally forward-plans the order from the point where demand triggers the reorder point. If demand drops below the safety stock within the lead time, the system instead backward-plans the order so it arrives earlier.
This policy works best for simple items with predictable and continuous withdrawal.
How the fixed reorder quantity policy works in Business Central
You set this up on the item card in Business Central. On the Planning tab, you choose the fixed reorder quantity reordering policy. This gives you a few fields to fill in:
- Reorder point – the inventory level that triggers a new order, for example 50
- Reorder quantity – the fixed amount you reorder each time, for example 100
- Safety stock – the buffer you want to keep on hand, for example 5
The key point is that the reorder quantity is always the same. Every time the policy triggers, it orders the same fixed amount, regardless of how much demand there has been.
How the inventory level moves over time
Picture the inventory level as a line that starts at whatever quantity you have in stock. Every time there is a demand, you withdraw a little from inventory, so the line drops step by step.
When the inventory level falls to the reorder point, the system creates a planned order. The type of order depends on the item. For a production item, it creates a production order. For a purchased item, it creates a purchase order.
After the lead time, the ordered quantity arrives in stock and lifts your inventory back up by the reorder quantity. Then the cycle repeats. Each time the reorder point is triggered, the same quantity comes in.
Forward planning and backward planning
In the normal case, the system plans forward from the moment demand triggers the reorder point. It calculates the lead time forward and places the order so it arrives accordingly.
There is one situation where this changes. If, within that period, demand pushes the inventory down to the safety stock, the system reacts differently. Instead of calculating forward, it calculates backward so the order starts earlier. The result is a backward-planned order with the same reorder quantity that arrives earlier, protecting your safety stock.
When to use the fixed reorder quantity policy
This policy fits simple items or items with predictable and continuous withdrawal. If demand is steady and you can rely on a regular pattern, ordering the same fixed quantity each time keeps planning straightforward.
Q&A
What does the fixed reorder quantity policy do in Business Central?
It reorders the same fixed quantity every time your inventory level drops to the reorder point. The order quantity stays the same regardless of demand.
Where do you set up the fixed reorder quantity policy?
On the Planning tab of the item card. There you select the reordering policy and enter the reorder point, the reorder quantity, and the safety stock.
What is the difference between forward and backward planning with this policy?
Normally the system plans forward from the point where demand triggers the reorder point. If demand drops to the safety stock within the lead time, the system plans backward instead so the order arrives earlier.
What type of order does the policy create?
It depends on the item. The system creates a production order for a production item and a purchase order for a purchased item.
For which items is the fixed reorder quantity policy a good fit?
Simple items or items with predictable and continuous withdrawal, where demand follows a steady pattern.