Fixed Order Interval System

Definition

Periodic review and replenishment at defined intervals. This reference is designed for practical industrial stores, MRO, production and materials-management environments.

Objective

Review stock at fixed intervals and replenish toward a target.

Scope

Apply the method at item, category, location or plant level as appropriate. The control should connect planning, purchasing, stores transactions, physical verification and management review.

Required Inputs

Review period
lead time
target stock
inventory position.

Methodology

Define the business requirement, scope and review period.
Validate item master, consumption, stock and open transaction data.
Calculate or classify using the defined method.
Compare the result with criticality, supplier constraints and future demand.
Assign an action owner, due date and review frequency.
Monitor KPI movement and revise parameters when conditions change.

Formula / Control Logic

Order Qty = Target Stock − Inventory Position at each review date.

Worked Industrial Example

Weekly review with target 2,500 and position 1,700 → order 800, subject to constraints.

Decision Rules

Choose review frequency according to item criticality and demand.
Protect against demand during review plus lead time.
Use exception monitoring between reviews for critical items.

Industrial Controls

Authorized master-data and parameter changes
ERP transaction discipline and document traceability
Physical verification and reconciliation
Exception reporting with named ownership
Periodic management review of ageing, service and capital exposure

KPIs

Service

Availability, fill rate and stock-out performance.

Accuracy

Book-to-physical reliability and transaction quality.

Capital

Turnover, coverage, ageing, excess and dead stock.

Common Errors

Long review interval for critical items.
Using on-hand instead of inventory position.
Ignoring supplier calendar.

Excel / MIS Application

Useful fields: Item Code, Description, UOM, Opening Qty, Receipt Qty, Issue Qty, Closing Qty, Unit Rate, Annual Consumption, Current Stock, Open PO, Lead Time, Safety Stock, ROP, Min, Max, ROQ, ABC, VED, FSN, Ageing, Action.

Management Review Questions

Which items require action now, and why?
Are open orders aligned with actual requirement?
Which exceptions are recurring and what is the root cause?
Which parameter should be changed, and what evidence supports the change?

Related Inventory References

Professional practice: A calculation is a control aid, not a substitute for engineering judgement, approved policy, physical verification or business-risk assessment.