Calculate average consumption
Use at least four representative weeks and separate products with different purposes. Convert use into bales and record weekly variation.
- Average weekly use
- Highest observed use
- Bales for each product
Define the reorder point
The reorder point should cover use during delivery time plus a controlled reserve. A short lead time and stable use may allow a smaller reserve.
- Use during lead time
- Reserve for variation
- Threshold expressed in bales
Review after each month
Compare theoretical and actual stock and investigate differences. Adjust recurring quantity when new equipment, extra shifts or seasonal periods appear.
- Monthly inventory
- Explained differences
- Updated recurring quantity
Frequently asked questions
What is a reorder point?
It is the stock level that triggers the next order so consumption remains covered until delivery.
How much safety stock is suitable?
It depends on consumption variation and delivery time; begin with a moderate value and adjust it monthly.