SIMMS Inventory Software Blog

To make your pennies make sense, the best inventory practice must take into consideration vendor minimums as well as freight costs. To take advantage of this, inventory managers make line buys, wherein rather than just place single items onto purchase orders, the expense and the lead times for items are minimized by ordering a series of items that will be needed all on one order. A line point is the stock count at which an item becomes eligible for ordering. If the on-hand count is below the line point but has not yet reached the (re)order point, order an item. SIMMS Inventory Management software allows you to keep things straight and know when your line points have been reached, and further, to make sure all such items from a set vendor are being ordered at the same time, thus optimizing the ordering process and minimizing the expenses involved. To manually figure your line point, acquire the item’s demand per day; next, you’ll need the number of times your business meets the vendor’s best deal criteria for the item (known as the order cycle) — now multiply these two numbers. Finally, add the (re)order point you have set for the item. This sum is your line point for the item.
Contact KCSI today to learn more about how line points, surplus points and (re)order points can all help you optimize your inventory management.