Inventory Replenishment Quantities
Check outstanding commitments.
Estimated reading time: 1 minute
Oracle’s inventory guide describes min-max planning: net qualifying stock and supply against included demand, test the minimum, then replenish toward the maximum. Lot multiples affect purchases.
Fictional: minimum 100 units, maximum 250. Usable stock is 80 units, qualifying open purchase orders total 90, and included unfulfilled demand totals 100. All receipts and demand fall within the cutoffs; nothing is counted twice.
Net availability is 80 + 90 − 100 = 70 units. Because 70 is below 100, the unrounded replenishment is 250 − 70 = 180 units.
The supplier requires multiples of 50, with no other quantity limits. Round upward to 200 units. At $10 each, the purchase costs $2,000 before freight, taxes or financing—not $1,800.
Projected net stock becomes 270, exceeding the target by 20 because of rounding. Ignoring demand would incorrectly show 170 and no reorder.
This is a planning calculation, not proof goods arrive before customers need them. Verify delivery dates and fund existing supplier commitments separately; the new order’s cost is not the entire cash requirement.
