•The inventory status is reviewed at regular intervals such as weekly or monthly.
•The re-order point is adjusted to consider the extended intervals between reviews.
•The formula for calculating the periodic review reorder point is

¨ROP= D( T + P/2) +SS, where

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-ROP= re-order point
-D=average daily demand
-T= average performance cycle length
-P=review period in days
-SS= safety stock
•Average inventory for periodic review is

represented as I= Q/2 + (P x D)/2 + SS,

-I= average inventory in units
-Q= order quantity in units
-P= review period in days
-D= average daily demand
-SS= safety stock.
•Because of the time interval introduced by periodic review, periodic control systems generally require larger average inventories than perpetual system.
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