Situation
How do you set a reorder point (ROP) and a reorder quantity (ROQ) when the equipment is new or there is no process to establish a stock holding that will meet the needs of the business?
Complication
Free-Text (direct charge) spend complicates the ability for any formula to be effective. Reorder points need to cover the total demand in order to effectively reduce the risk at the lowest possible cost.
Resolution
MiLi’s ROP & ROQ calculator helps to solve this problem. MiLi helps to set initial ROPs as well as update existing ROPs.
Benefits
- The ability to review stock levels factoring in the impact to the business, historical usage and cost to hold.
- Identification and review mechanism to manage SLOB materials.