The following tabulates the advantages and disadvantages of using the Reorder level inventory control system:
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ADVANTAGES of Reorder Level Inventory Control |
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DISADVANTAGES of Reorder Level Inventory Control |
| 1 |
Lower stocks on average |
1 |
Many items may reached re-order level at the same time, thus overloading the re-ordering systems |
| 2 |
Under reorder level inventory control the items ordered in Economic quantities via the EOQ calculation |
2 |
Items come up for re-ordering in a random fashion so that there is no set sequence |
| 3 |
Under reorder level inventory control there are somewhat more responsive to fluctuations in demand |
3 |
In certain circumstances ( eg variable demand, ordering costs etc), the EOQ calculation may not be accurate. |
| 4 |
Automatic generation of a replenishment order at the appropriate time by comparison of stock level against re-order level inventory controls |
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| 5 |
Appropriate for widely differing types of inventory within the same firm |
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[ see all other topics on inventory control or management]