How Optiply Calculates Your Advised Reorder Period
The Advised Reorder Period is the number of days Optiply recommends you wait between placing purchase orders for a specific product. This calculation is a key component of effective inventory management because it helps you determine the perfect ordering frequency:
Not too often: Avoids incurring unnecessary order processing costs (admin time, fixed shipping fees).
Not too late: Prevents stockouts and lost sales due to running out of inventory.
Optiply automatically calculates and sets this advised period when the Reorder Period field in your product settings is left empty.
How Optiply Determines the Advised Reorder Period
The Advised Reorder Period is based on an advanced calculation that aims for cost-efficient ordering. Essentially, Optiply uses an economic-based model to find the sweet spot where the cost of placing an order is balanced against the cost of keeping the item in stock.
The following data points are used in the calculation:
Data Point | Source | Why It Matters |
Fixed Order Costs | Set on the Supplier Page | Represents the cost incurred every time you place an order with that supplier (e.g., freight fees, admin time). |
Inventory Holding Costs | Defaulted to a percentage (usually 20%) | The cost associated with storing inventory (e.g., warehousing, insurance, obsolescence risk). |
Forecasted Demand | Optiply's Forecasting Engine | Predicts the sales rate, determining how quickly you'll consume the stock. |
Purchase Prices | Pulled from your WMS/ERP | Used to determine the total value of the inventory you are holding. |
Minimum Order Value (MOV) | Set on the Supplier Page | The minimum monetary value the supplier requires for a purchase order. |
When to Use the Advised Reorder Period
You should rely on the Advised Reorder Period for any product where achieving the lowest overall ordering and holding cost is your primary goal.
If you have a strict internal ordering schedule (e.g., "We order from this supplier every Tuesday"), you can manually override Optiply's advice by entering a value in the Reorder Period field in the product settings.
If you leave the Reorder Period field blank, Optiply will automatically use its calculated Advised Reorder Period to inform its purchasing suggestions.
❓ Frequently Asked Questions (FAQs)
What is the difference between "Advised Reorder Period" and the standard "Reorder Period" field?
The Advised Reorder Period is the optimal value calculated automatically by Optiply. The standard Reorder Period is a field where you can input a value manually, which will override Optiply’s advice if your business requires a fixed schedule.
What is included in the "Fixed Order Costs"?
Fixed Order Costs typically include administrative labor for creating the purchase order, any fixed costs related to transportation or freight that apply per shipment, and customs clearance fees. You must ensure this cost is accurate on the Supplier Page.
How can I influence the Advised Reorder Period calculation?
To change Optiply's advice, you should update the input data points:
Increase the Fixed Order Costs (this will cause Optiply to advise ordering less often).
Adjust the Inventory Holding Cost percentage (a higher percentage will cause Optiply to advise ordering more often).
Update the product's purchase price and forecasted demand.
Why is my Advised Reorder Period different for two similar products?
Even if the products are similar, their individual purchase prices, forecasted demand (sales velocity), and how they contribute to the minimum order value calculation can be different. Optiply calculates the best period for each product individually.