Perpetual Review


0
•Inventory status is reviewed to determine replenishment needs.
•Implemented through a reorder point and order quantity.

¨ROP= D x T + SS, where

Advertisement
•ROP= reorder point in units
•D= average daily demand in units
•T= average performance-cycle length in days
•SS=safety or buffer stock in units.
•The following are considered in perpetual review:
-On hand inventory represents quantity that is physically present in the particular distribution facility.
-On-order inventory represents quantities that have been ordered from suppliers.
-If on-hand plus on-order quantity is less than or equal to the established reorder point, inventory control process will initiate another replenishment order.
-Mathematically, this can be stated as
-If  I+q £ ROP then order Q, where
(a)I= inventory on hand
(b)q= inventory on order from suppliers
(c)ROP = re-order point in units
(d)Q= order quantity in units.
•Average inventory level for a perpetual review system is calculated as
(a)I = Q/2 + SS, where
-I= average inventory in units
-Q= order quantity in units, and
-SS= safety stock in units
•The assumption is that P.O. will be placed when the reorder point is reached and there is a continuous monitoring of inventory system.
Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to contact@bms.co.in.

Like it? Share with your friends!

0
BMS Team

We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to contact@bms.co.in.

0 Comments

Ask Us On WhatsApp
Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format