Talk:Reorder point/Archive 1

Archive 1

General

The article claims that ROP and ROQ are essentially the same thing is this argument true? --Max Allen G (talk) 03:49, 7 November 2009 (UTC)

Where does it claim that? it says at the top that ROP is where you go ahead and order the ROQ. — Preceding unsigned comment added by 209.12.104.146 (talk) 21:54, 7 July 2011 (UTC)

There is no real consenus in the literature as to how to calculate the re-order point for inventory management purposes. Accounting texts suggest : Maximum demand X maximum lead-time, SCM texts tend to favour Average demand X Average lead time, as the former is too conservative, and leads to un-necessary high stocks. Operations Management texts acknowledge that the issue is complex and statistical methods should be considered. — Preceding unsigned comment added by Captainbooley (talk • contribs) 15:53, 21 October 2011 (UTC)

In order to clarify the analysis, it's best to separate the actual demand forecasts (which indeed involve statistical forecasts - from "risk analysis" that comes on top of it. In particular "Average demand X Average lead time" is nothing but a "lead demand" forecast. --Joannes Vermorel (talk) 12:55, 3 January 2012 (UTC)

In addition to the above, the safety stock calculation is a cycle safety stock. It looks mathematically correct, but it is does not align with what most businesses seek to fulfil. Most inventory managers would want to use a fill-rate (off-shelf availability). The calculation to determine a fill rate safety stock is entirely different. This piece also implicitly assumes a normal distribution of lead-time demand which is not universally applicable. — Preceding unsigned comment added by 62.189.151.66 (talk) 16:14, 15 January 2013 (UTC)

Major alterations needed

From a operations management perspective, this page has many incorrect entries. One simple example was the reference to EOQ, which is a technique for determining the amount to order. Reorder point is a technique for determining when to place an order. I only corrected the first couple lines to reflect the correct definition of reorder point. BTW, the definition of ROP is not in question. The efficacy of its approach is debated widely and alterations and approaches to the basic formula are many. The basic formula is ROP=DDLT+SS (Demand During the normal Lead Time plus any Safety Stock).

I'm going to try to get back to this page soon and try a major rewrite. I have a decent background in this area, but any suggestions are welcome. Gloucks (talk) 05:12, 29 August 2014 (UTC)