Periodic Replenishment
Definition
Periodic replenishment is an inventory control method that reviews stock at fixed intervals — such as weekly — and orders enough each time to restore inventory to a target level, instead of reordering whenever stock hits a reorder point.
In Practice
In a periodic (fixed-interval) system, the order quantity varies while the timing is fixed: each review, the planner orders the difference between the target level and current inventory position. The target must cover average demand over the review period plus lead time, plus safety stock for variability across that whole window — which is why periodic systems carry somewhat more buffer than continuous-review systems.
The payoff is operational convenience: reviewing a supplier's full line every Tuesday lets orders be combined into one PO or truckload, capturing freight consolidation and order-minimum discounts. Retail store ordering, VMI programs, and milk-run supply loops are classic periodic replenishment applications.
Frequently Asked Questions
How is the order-up-to level set in periodic replenishment?
It must cover expected demand over the review interval plus the replenishment lead time, plus safety stock for variability across that combined window. For example, with weekly reviews, a 2-week lead time, and 100 units of weekly demand, the target is 300 units plus safety stock.
What is the difference between periodic and continuous review?
Continuous review monitors inventory constantly and triggers a fixed-quantity order whenever stock falls to the reorder point; periodic review checks at set intervals and orders a variable quantity up to a target. Periodic needs more safety stock but enables consolidated, predictable ordering across many SKUs from one supplier.
When is periodic replenishment the better choice?
When orders benefit from being grouped: many SKUs from one supplier combined into a single weekly PO or full truck, vendor-managed inventory with scheduled visits, or store ordering on fixed delivery days. The freight and administrative savings usually outweigh the extra safety stock the longer exposure window requires.
Related Calculators
Related Terms
An inventory policy where stock levels are checked at fixed intervals and an order is placed to raise inventory to a target level. Order timing is fixed while order quantity varies.
Continuous ReviewAn inventory policy where stock is monitored constantly and a fixed quantity is ordered whenever inventory falls to the reorder point. Order quantity is fixed while order timing varies with demand.
Reorder PointThe inventory level that triggers a replenishment order. It equals expected demand during supplier lead time plus safety stock.
Min-Max PlanningA simple replenishment method where an order is triggered when inventory falls to a minimum level and stock is replenished up to a maximum level. The min acts as the reorder point and the max caps the order-up-to quantity.