Order-Up-To Decision

Inventory Position

Periodic review uses inventory position: on hand plus on order minus backorders.

highlighted = computed this step

Position formula

Inventory position equals on hand plus on order minus backorders.

position=on hand+on order−backorders\text{position}=\text{on hand}+\text{on order}-\text{backorders}
Position and order tableOrder quantity is the exact gap from position up to S, capped at zero.position and order rowson handon orderbackorderspositionqsnapshot7401112position high2500250

Snapshot position

The snapshot position is 11.

7+4−0=117 + 4 - 0 = 11
Position and order tableOrder quantity is the exact gap from position up to S, capped at zero.position and order rowson handon orderbackorderspositionqsnapshot7401112position high2500250

Position note

On-order units count because they are already committed to arrive.

position includes open orders\text{position includes open orders}
Position and order tableOrder quantity is the exact gap from position up to S, capped at zero.position and order rowson handon orderbackorderspositionqsnapshot7401112position high2500250