Replenishment planning: reorder points, ABC and inventory turns

Skills you'll practise

• Calculate a reorder point from average daily demand, lead time and safety stock, and recalculate it when lead time changes
• Decide from a stock status report which items need ordering now, using on-hand plus open orders
• Classify items A, B or C by annual usage value and explain how the classes change attention and count frequency
• Calculate inventory turns and days of supply, stating the denominator used
• Calculate an economic order quantity and state the assumptions that limit it
• Recognize the causes of excess and obsolete stock and raise them with evidence

Course outline

1. 1.Replenishment planning: reorder points, ABC and turnsVideo · 3 min
2. 2.When to reorder: reorder point and safety stockLesson · 20 min
3. 3.Where to focus: ABC classificationLesson · 15 min
4. 4.How fast stock moves: turns, days of supply, EOQ and excessLesson · 20 min
5. 5.Replenishment planning: reorder points, ABC and inventory turns: knowledge checkKnowledge check · 18 questions
6. 6.Out of stock againScenario
7. 7.Final exam11 questions · passing it completes the course, so people who already know the material can test out

Sources it draws on

The lessons and questions are written from these references, so learners can go back to the original.

• ASCM (APICS) supply chain dictionary and body of knowledge: reorder point, safety stock, ABC classification, inventory turns
• General operations and warehouse practice