Operations inventory management: Defining replenishment from requirements philosophy Essay Example

supply chain. The inventory planner relies on information from the materials demand planner to manage operations and control the flow for the purpose of achieving the optimal inventory level for a specific item and timeframe. Adjustments are then made to reorder points, replenishment lead times, and safety stock calculations to accommodate potential fluctuations in market demand to prevent stockouts. Reorder actions are necessary to ensure the overall effectiveness of inventory management. Factors such as item cost, physical and chemical attributes, continuity of demand, transportation characteristics, and storage and handling requirements are all carefully considered. The reorder level is determined through accurate calculations of production or working stock cycles that respond temporarily to the average customer demand during the period. Additionally,A safety or buffer stock is set up to account for variations in demand. This is done by adding allowances or extra stock to the regular stock level in case there is a discrepancy in the distribution of demand (Ross, 1996). The distinction between the demands doctrine and replenishment doctrine lies in their focus. The demands doctrine ensures that specific demands are met for production, while the replenishment doctrine takes into account external factors such as cost, lead time, transportation, and storage requirements for the item being considered. This is determined by specifying a reorder level for each item or material, with careful consideration of the availability of demand and supply.