Inventory Planning Beyond the Reorder Point

An order delivered on Friday can still be unavailable for sale until Monday if goods-in is busy. For the buyer deciding whether to replenish, Friday and Monday are two very different dates. Inventory planning needs to follow stock through to the point when it can fulfill an order, while accounting for demand and purchases already on their way.

Start with demand and stock you can use

Recent sales provide a starting point for estimating demand, but the numbers need context. A promotion may explain an unusually busy week. A quiet week when the product was out of stock tells you little about what customers would have bought. Look at what changed before carrying an average into the next ordering period.

Then check how much stock is genuinely available. Goods committed to customer orders are spoken for, even while they remain on a shelf. Damaged items awaiting inspection belong in a separate category. A reorder plan built on an inflated stock figure can produce a reassuring date that comes too late.

Check what is already on order

A reorder point should prompt a review, not automatically trigger another purchase. A simple threshold reflects expected demand while replacement stock is prepared, transported and made usable, plus a buffer for uncertainty.

Consider an illustrative product selling 10 units per working day. If a new order takes seven working days to become usable, demand during that period would be 70 units. Add a 20-unit buffer for this example and the reorder point is 90 units. A real buffer would reflect the product’s demand and the reliability of its replenishment time.

Suppose there are 70 usable units on hand, none reserved for customers, and another 30 confirmed as due to be received and available tomorrow. Including that incoming order gives a stock position of 100 units. A decision based only on the 70 units on the shelf could duplicate a purchase. The promised date matters as much as the quantity: an outstanding order helps only if it becomes usable before stock is needed. Review both against expected sales rather than adding every open purchase order to one undated total.

Plan to the stock-available date

The supplier’s dispatch estimate is only part of the timetable. After processing and dispatch come transport, unloading and checking. Depending on the product, further checks may be needed before the goods can enter stock available for fulfilment.

Keep separate dates for expected dispatch, delivery and availability. The distinction becomes especially useful when several deliveries are booked for the same morning. A warehouse with limited receiving space or staff may need longer to process them, even if every vehicle arrives on schedule. If an order is delivered in batches, record when each batch should be ready rather than treating the entire purchase as a single arrival.

Before settling on an order date, ask the receiving team whether there is room for the delivery and when its contents can realistically enter usable stock. A crowded goods-in schedule is easy to miss in a purchasing report.

Compare the full cost of replenishment

A larger order might lower the supplier’s price per unit while taking up more storage space and tying up cash. Smaller orders can reduce the amount held at once, although repeated deliveries and receiving work also have a cost. Compare complete replenishment options, not just two unit prices.

For palletised stock, a quote for cheap pallet delivery is one input; receiving labour and storage requirements are others. Consider those costs alongside when the goods will be needed. A volume discount loses some of its appeal if the extra stock sits untouched or arrives when there is no capacity to put it away.

Review the dates as they change

Choose a review rhythm that matches the product’s sales pattern and the supplier’s ordering cycle. Update expected demand, usable stock, customer commitments and orders in transit. Check each incoming order’s expected availability date against the stock needed to cover sales until then.

Keep a note of the forecast, buffer and dates behind each decision. When sales move faster than expected or an arrival slips, the next review can address the changed assumption and adjust the order, rather than starting the plan again.