Page 26 - 8025 - Controlling and locating stock Learner Guide.docx

ADVANCED

RISK MA

Monitoring the Reorder level
The re-order level for stock needs to be signalled for replenishment. Some systems that are used to
signal when replenishment is required include the following.

 A line around a bin showing the level when replenishment is required.
 The two-bin system. When one bin runs out picking is carried out from the second bin and
the empty bin is replenished.

 A count of stock in a location can indicate whether the re-order level has been reached.

Reordering systems
Re-ordering stock can be based on:

 Push systems in which fixed quantities are ordered or stock is re-ordered at fixed periods of
time

 Pull systems in which the demand for stock items drives the re-ordering.
Push systems

In fixed period ordering a set amount of stock is ordered in set periods of time.
For example, 10 cartons of an item or items are ordered on the first day of each month.

This system of re-ordering relies on the accurate estimate of the amount of stock required over pre-
determined periods of time. This is usually built up from patterns of past use.
Advantages of fixed period ordering are that:

 Stock is delivered automatically
 Excess stock does not need to be stored

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