Min/max
Also called min-max
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is min/max?
Min/max is a simple replenishment method in which each item has a minimum and a maximum stock level that trigger and size each new order. When available stock plus what is already on order falls to the minimum or below, the buyer orders enough to bring that total back up to the maximum. The minimum works like a reorder point, and the gap between min and max sets how much is ordered each time.
How it works
Counting stock already on order is what prevents double ordering. If the calculation looks only at the shelf, every review while a delivery is in transit triggers another order for the same gap.
Min/max example
Hose clamps have a min of 50 and a max of 200. With 45 in the bin and 100 already on order, the position is 145 and nothing is ordered; a week later, with that delivery in and the bin back down to 48, the order is for 152.
Related terms
- Reorder pointA reorder point is the stock level at which a distributor places a new purchase order for an item, set so the new stock arrives before the old runs out.
- Safety stockSafety stock is extra inventory a distributor keeps to cover unexpected demand or late supplier deliveries, so it doesn’t run out before the next shipment.
- Available inventoryAvailable inventory is the quantity of an item a distributor can sell right now: the stock on hand minus the stock already committed to open orders.
- Vendor-managed inventory (VMI)Vendor-managed inventory (VMI) is an arrangement in which a distributor or manufacturer keeps a customer’s stock filled to agreed levels.
- Economic order quantity (EOQ)Economic order quantity (EOQ) is the order size that minimizes the combined cost of ordering and holding an item with steady demand.
