What are Reorder Points and Quantities and How are These Established?

At Speaker Fulfillment Services we are firm believers in the importance of getting your products shipped out the door right away.  These keeps your customers happy and reduces refunds.

In order to follow through on our promise of orders in by noon are shipped the same business day you need to have inventory on hand.  You don’t want your customers to have to wait so the product can be manufactured, which can take from 4-10 days depending upon the complexity of the product and how many jobs are in our production queue at a given time.

So, what we strive to do is maintain your inventory within a range so that you never run out of product all the way so orders have to be held.  At the same time, we don’t want to produce any more than necessary so you have a minimal amount of money tied up in inventory.

Let’s say you’re selling 10 units of a given product per week.  That means we might set a reorder point at 20 units.  So, when your inventory level was down to 20 units we’ll automatically generate a work order to produce 40 more units.  That is the reorder quantity.

Your inventory would fluctuate between around 5 – 45 units overall in this example.  Obviously, your particular needs for reorder points and reorder quantities will vary by product.  The specific numbers will be worked out jointly between yourself and your Client Care Representative here at Speaker Fulfillment Services.

Previous post:

Next post: