Articles on: Inventory Replenishment

Just-in-Time Inventory Replenishment by Product Variant


This report provides detailed insights into your inventory, focusing on Just-in-Time (JIT) replenishment for each product variant. It helps in optimizing inventory levels, reducing carrying costs, and ensuring product availability.

Key Terms

SKU: Stock Keeping Unit, a unique identifier for your product variants.
Vendor Lead Time: Time taken by the supplier to deliver products after an order is placed.
Safety Stock Days: The buffer stock to prevent stockouts.
Units Sold in Historical Period: Total sales of a product variant in a specified period.
Avg Units Sold per Day: Daily average sales for each product variant.
Quantity On-hand: Current stock levels of each product.
Incoming Inventory: Ordered stock that is yet to be received.
Days of Inventory Remaining: Estimated time until the current stock runs out.
Reorder Point: The stock level at which a new order should be placed.
Reorder Quantity: Suggested quantity to order at the reorder point.
Unit Cost: Cost per individual unit.
Reorder Cost: Total cost for reordering the suggested quantity.

Formulas for Reorder Point and Reorder Quantity

Reorder Point: Calculated as [Average Units Sold per day] x ([Vendor Lead Time] + [Safety Stock Days]). This is the inventory level at which you should trigger a new order.
Reorder Quantity: When the 'Quantity On-hand' falls below the Reorder Point, the reorder quantity is equal to the Reorder Point. If the on-hand quantity is higher than the Reorder Point, no replenishment is suggested.

Using the Report

Monitor Stock Levels: Check the 'Quantity On-hand' and 'Days of Inventory Remaining' to understand current stock status.
Identify Replenishment Needs: Use the Reorder Point formula to determine when to reorder and the Reorder Quantity to know how much to order.
Plan Purchases: Use 'Reorder Quantity' and 'Reorder Cost' to plan your inventory purchases both in terms of quantity and budget.
Evaluate Sales Performance: 'Units Sold in Historical Period' and 'Avg Units Sold per Day' provide insights into the sales performance of each product variant.
Manage Supplier Relations: 'Vendor Lead Time' helps in planning orders considering the time it takes for products to be delivered.

Tips for Effective Management

Regularly review the report to stay ahead of inventory needs.
Coordinate with suppliers for products with high sales velocity or long lead times.
Adjust safety stock levels based on sales trends and seasonality.
Use the data to negotiate better terms with suppliers, like reduced lead times or bulk purchase discounts.


This report is a powerful tool for maintaining optimal inventory levels, avoiding overstocking or stockouts, and ensuring customer satisfaction through product availability.

Updated on: 12/12/2023

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