The value selected in the Reordering Policy field significantly influences how the Requisition Worksheet interprets and processes demand in Microsoft Dynamics 365 Business Central. Each reordering policy defines specific rules for how inventory planning calculates supply to meet demand, and this affects the worksheet’s recommendations for orders.

Key Reordering Policy Values and Their Impact:

1. Fixed Reorder Quantity
   • Behavior: This policy ensures that whenever the inventory level falls below the reorder point, the system creates a supply order (e.g., purchase or production order) for a predefined fixed quantity.
   • Demand Interpretation:
     • Only considers the reorder point and maximum inventory levels for supply generation.
     • Does not directly respond to individual demands; it always suggests the fixed quantity.
2. Maximum Quantity
   • Behavior: Replenishment happens to bring inventory up to the specified maximum quantity when stock falls below the reorder point.
   • Demand Interpretation:
     • Considers the reorder point as a threshold.
     • The demand is calculated to cover the shortfall up to the maximum quantity rather than actual or net demand.
3. Lot-for-Lot
   • Behavior: This policy matches supply orders exactly with the net demand within the reorder cycle.
   • Demand Interpretation:
     • The system considers actual demand (sales orders, production orders, etc.) during the planning period.
     • It generates a supply order to fulfill the exact demand quantity, minimizing excess inventory.
4. Order
   • Behavior: A supply order is created for each demand, regardless of other considerations like reorder points or lot sizes.
   • Demand Interpretation:
     • Each demand (e.g., a sales order) triggers a corresponding supply order.
     • This policy is useful for environments requiring highly customized or on-demand inventory management.

Impact on Requisition Worksheet:

Aspect	Effect Based on Reordering Policy
Order Quantity	Determined by the reordering policy (fixed quantity, maximum level, or matched to demand).
Trigger Point	Replenishment is driven by reorder point, maximum quantity, or exact demand, depending on the policy.
Order Frequency	Policies like Lot-for-Lot consider demand within a planning period, while Order reacts immediately.
Demand Aggregation	Policies like Lot-for-Lot aggregate demand, while Order treats each demand individually.
Excess Inventory	Policies like Fixed Reorder Quantity and Maximum Quantity may lead to excess inventory if demand fluctuates.

Choosing the Right Policy

• Lot-for-Lot: Best for environments with fluctuating demand and a focus on minimizing inventory levels.
• Fixed Reorder Quantity: Suitable for steady-demand scenarios where maintaining a specific stock level is essential.
• Maximum Quantity: Ideal for items where maintaining stock at a defined maximum level is critical to operations.
• Order: Best for customized or made-to-order scenarios.