Fixed Order Interval

Fixed order interval is a system in which orders are placed on a periodic basis. For example, an order may be placed every month, every week, or a certain amount of times per week. The time that the order is placed does not usually change; hence it is a “fixed” order interval. The quantity of inventory being ordered is variable and can change at any time. The inventory must be continually checked in order to place an accurate order. In order to avoid a substantial amount of time between each order, the seller must foresee how much of the product is needed before the next order is placed. Retail firms often follow this model in order to keep the minimum amount of inventory possible while still catering to their customers.

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