Order-Up-To Decision

Order Quantity

At review time, order the exact positive gap from inventory position up to S.

highlighted = computed this step

Gap to S

The position is below S, so the order fills the gap.

S−positionS-\text{position}
Order-up-to decisionThe chart recomputes inventory position and the order quantity.order-up-to decisionS = 18 + 5 = 23protection periodreview 4 dayslead 2 daysprotection demand 3 x 6 = 18inventory position and order quantitysnapshoton handon orderbackorderspositionqdecisionsnapshot7401112order 12position high2500250order 0q = max(S - position, 0)deterministic demand and lead time only

Order quantity

Order quantity is 12 units.

23−11=1223 - 11 = 12
Order-up-to decisionThe chart recomputes inventory position and the order quantity.order-up-to decisionS = 18 + 5 = 23protection periodreview 4 dayslead 2 daysprotection demand 3 x 6 = 18inventory position and order quantitysnapshoton handon orderbackorderspositionqdecisionsnapshot7401112order 12position high2500250order 0q = max(S - position, 0)deterministic demand and lead time only

Place order

At this review, place an order for 12 units.

order quantity=12\text{order quantity}=12
Order-up-to decisionThe chart recomputes inventory position and the order quantity.order-up-to decisionS = 18 + 5 = 23protection periodreview 4 dayslead 2 daysprotection demand 3 x 6 = 18inventory position and order quantitysnapshoton handon orderbackorderspositionqdecisionsnapshot7401112order 12position high2500250order 0q = max(S - position, 0)deterministic demand and lead time only