Reordering Point SystemAs Customer Relationship , the short of inventory or stock is the big problem.
Improvement of this problem seems to be easy, but not.
If there are much inventory, we can ship if it happenes immidiately.
Inbentory has the role to reduce the effect of the short.
We often have the mind to prepare a lot of inventory to avoid the short. But there are problems caused by inventory.
The first problem is the short of space. Wide area is needed for the inventory. And there is the case that we need to keep air condition control for the wide area.
And there are problems that "Picking is hard work,", "Limit of expiry date" and so on.
In the field of Industrial Engineering , inventory has the problem because it could be the break of cash flow.
Points to plan the minimum inventory are lead time, unit size of reorder, uneveness of shipping size and cost to move.
If lead time is short or unit size of reorder is small or unevenness of shipping size is small, inventory goes minimum.
It is difficult for the planning because if unit size of reorder becomes small, the number of moving becomes many then the cost goes bad.
Theories in Reordering Point System and Kanban System are for planning for lead time, unit size and unevennes. But the cost is planned together.
Lead time is the time from reorder to arrival. If we reorder today and arrival is tomorros, lead time is "1 day".
If lead time is 0, we do not need to prepare the inventory. But if it is not 0, we need reorder considering the arrival day.
In the theories of minimun inventory, if the shipping is earier than the arrival, we need to add 1 day to the lead time.
If we want to buy 3 pens, there is the case that we need to buy the unit of 12 pieces.
If the size unit is large, invenroty goes large.
If the size of shipping is not same, we need to prepare inventory for the largest case.
If there are perfect shipping plan (forecast), we can make perfect reorder plan considering the lead time. If this approach is possible, the inventory becomses 0.
It is the rare case that there is the perfext forecast. In this case, care for the lead time and uneveness is the point.
Reordering Point System and Kanban System are developped for this case.
