Periodic Review
Definition
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.
In Practice
Under periodic review, the planner looks at each item every R days, weekly for example, and orders up to a target level S that covers demand over the review period plus lead time, plus safety stock. Because stockouts can occur at any point in that longer exposure window, periodic review needs more safety stock than continuous review for the same service level.
Its operational advantage is coordination. Reviewing all of a supplier's items on the same day lets the buyer consolidate lines into one PO, fill trucks or containers, and hit order minimums, which is why periodic review dominates in retail store ordering and import replenishment.
Example: a housewares importer reviews each Asian supplier every two weeks and orders every SKU up to its target, building consolidated 40-foot containers. One SKU with a target of 900 and inventory position of 340 gets an order for 560 units in that cycle.
Related Calculators
Related Terms
An 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.
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.
ReplenishmentThe process of restocking inventory to meet ongoing demand, whether by purchasing from suppliers, transferring between locations, or triggering production. It is the execution engine that keeps stock policies real.
Safety StockExtra inventory held beyond expected demand to protect against variability in demand or supply. It acts as a buffer that keeps orders flowing when forecasts miss or deliveries run late.