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Min/Max

Min/Max or Min/Max Replenishment is a Term describing the Inventory Control Practice where inventory is replenished (Make or Buy) only when a minimum inventory level (Min) is reached. The Reorder Quantity determines the maximum inventory level (Max).

Min/Max Replenishment is a Make-to-Stock strategy using the Pull principles to determine the moment and amount of replenishment ordering.

Notes

  • Min is the reorder point. The Replenishment Cycle Time determines the true minimum inventory level, as inventory may continue to reduce between the date/time of reordering and date/time of receipt.
  • Max is the order up-to level. This inventory may not be achieved due to inventory reduction during the time it takes to replenish the inventory (Replenishment Cycle Time).

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