The order policy is a subrange of the procurement. It regulates, when materials requirements in the stock management of an enterprise are covered by an order and how much is ordered. The correct need is to be determined and an optimum in the order policy to be achieved by the combination of fixer or variable order quantity and order period.

In order to find the optimal order policy, the enterprise must weigh among other things orderfixed costs (= with each order in the same way to result), distribution costs and stock program costs against each other, in order to minimize the sum costs.

An enterprise does not only pursue an order policy. Usually several variants for different materials groups are combined. It comes to politics-mixes. The higher the consumption of individual materials groups is, the more is suitable an order policy with variable order period materials can with the help of the ABC analysis and the XYZ analysis be divided around the best suitable policy to select.

The costs contribute a crucial part to the choice of the policy. There are however also cost-independent decision factors like e.g. long-term planning or current supply contracts.

Politiken in the detail

On the basis four developments order quantity, order period, fixed and variable the four Grundpolitiken of the order are derived. Green, O: Industrielle stock management (P. 487, Tab. 6-9). In: Schweitzer, M. (Hrsg.): Industrial company teachings. Munich 1994.

Putting one:

t = order rhythm

s = notifiable stock level/order border

S = planned stocks

q = order quantity

Additionally to the aforementioned Bestellpolitiken, which consider two developments, two further politics policies formed, which consider three decision alternatives. The t, s, S-politics and the t, s, q-politics.

t, q-politics

The order quantity and - period are in advance fixed. This politics are called also order rhythm lot size politics, since to fixed dates fixed quantities are ordered. Only small arrangement expenditure and no current control of the stock needs the t, q-politics. It can lead however with need fluctuations to shortfalls or to high storage costs (excessive stock remainders).

t, S-politics

The order quantity is variable, the order period is fixed. It is called order rhythm camp level politics (periodic order procedure), since to fixed order dates the quantity up to reaching planned stocks, needed in each case, is ordered. With the t, S-politics are against worked the danger of the excessive stock remainders. Here the stock with planned stocks is upward limited. Since there is no notifiable stock level, which releases an order, it can come however to shortfalls.

s, q-politics

The order quantity is fixed, the order period is variable. The order point lot size politics (order point system) are called therefore in such a way, since with reaching the notifiable stock level a fixed order quantity is ordered. The s, q-politics considers need fluctuations, it comes therefore to no shortfalls and the capital freeze costs remain small. It requires however very high arrangement expenditure and current controls of the camp.

s, S-politics

The order quantity and - period are variable. This politics call themselves also order point camp level politics. If the notifiable stock level is reached, an order is released. The order quantity depends on planned stocks, up to which one fills up again and again. With the s, S-politics concern it a very complex order policy. Current controls of the stock are necessary. The capital freeze is however small and shortfalls is avoided.

t, s, S-politics

Here effected in fixed time intervals a comparison stock with the notifiable stock level. Reached or if the stock falls below the notifiable stock level, up to planned stocks one fills up. A constant monitoring of the camp requires the t, s, S-politics. The height of the stock comes by planned stocks is limited to no shortfalls and.

t, s, q-politics

Fixed order quantities are ordered to fixed order lead dates or if the notifiable stock level is reached and/or fallen below. The t, s, q-politics avoids likewise shortfalls. It can come however by the fixed order quantities to overstocking of the camp (there is no border upward), which can lead to high capital freeze costs.

See also: Optional system

Literature

• Oskar green: Industrielle stock management. In: Schweitzer, M (Hrsg.): Industrial company teachings. Munich 1994, ISBN 3800617552
• Wolfgang Vry: Procurement and storekeeping. 7. Edition 2004, ISBN 3470631271

Note

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