Try: job work, SCADA, GST, Faridabad, pharma
Try: job work, SCADA, GST, Faridabad, pharma
Free tool
Enter the usage and lead time of one item, and what an order and a year of holding stock cost you. Get the safety stock, the reorder point, the economic order quantity and how often to order – instantly. Free, no sign-up, nothing is stored.
Use your own figures for one item. Sample values are filled in.
Tejaxo Manufacturing uses Product A at an average of 40 units a day, 55 on a busy day (sample numbers). The supplier normally delivers in 10 working days, at worst in 14. Safety stock is 55 x 14 – 40 x 10 = 370 units, lead-time demand is 400 units, so the reorder point is 770 units. Over 300 working days the plant uses 12,000 units; with a cost of 500 per order and a carrying cost of 20 per unit per year, the EOQ is about 775 units – roughly 15 or 16 orders a year, one every 19 working days.
Reorder points work only if stock is up to date: receipts, issues to production and material lying with job workers must be booked as they happen. Order quantities are often rounded to the supplier’s pack size or minimum order. In Tejaxo ERP inventory management, re-order levels are kept per item, items below re-order are listed every day, and MRP raises requisitions for shortfalls – see MRP vs ERP. Also try our free stock valuation calculator, OEE calculator and corrugated box calculator.
Reorder point = average daily usage x average lead time + safety stock. When stock falls to this level, a purchase order is raised so the new material arrives before the safety stock is used up.
With the maximum-minus-average method: safety stock = maximum daily usage x maximum lead time – average daily usage x average lead time. It covers a busy period during the longest normal delay.
The economic order quantity balances the cost of placing orders against the cost of holding stock: EOQ = square root of (2 x annual demand x cost per order / carrying cost per unit per year).
The interest or opportunity cost of the money tied up, storage space, handling, insurance, and losses from damage, expiry or obsolescence – usually expressed per unit per year.
Whenever usage or supplier lead times change noticeably – in practice every few months, and before seasonal peaks.
Tejaxo ERP keeps re-order levels per item, lists items below re-order, and its MRP raises purchase requisitions for shortfalls, which then go through approval to purchase orders.
See items below re-order, MRP requisitions and approvals on WhatsApp in Tejaxo ERP – on your own items in the demo.
Manufacturing ERP with AI, WhatsApp approvals and SCADA / IIoT - designed, built, implemented and supported by one team since 2017.
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