Planning with reorder point item is disrupted with reservations

This is not NAV, not even ERP … this is just planning.

If you have a reorder item, you would like to plan stock level. Here, you asume a replenishment should be triggered when stock goes below that certain stock level (reorder point). If you have a proper calculation of this reorder point, you have some set of certainty that remaining stock (whatever is below reorder point) is enough to address incoming demands until the (just created) replenishment will come.

Under this assumption, why bothering with reservations? Why reserving stock for a given demand? Don’t you have certainty that stock would be enough? Planning will know nothing about this. If you have a stock reserved and incoming demands are coming, plan won’t do anything. You user should do.

Thus, if you ever need to reserve stock with reorder point items, you should keep in mind this might impact your planning since stock is there but cannot be used for incoming demands.

NOTE: if your reorder point does not provide accuracy here, you should use “Safety Stock”. Here, I would suggest you to read the entry just posted yesterday. In any case, this reorder point is based on the average demand within the lead time to replenishment. In other words, as an average, you should have enough stock here to cover incoming demands within time it takes to replenish.

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