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Operations Management: Processes and Supply Chains, 12th Edition by Larry P. Ritzman, Manoj K. Malhotra, Lee J. Krajewski

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Continuous Review System

A continuous review (Q) system, sometimes called a reorder point (ROP) system or fixed order-quantity system, tracks the remaining inventory of a SKU each time a withdrawal is made to determine whether it is time to reorder. In practice, these reviews are done frequently (e.g., daily) and often continuously (after each withdrawal). The advent of computers and electronic cash registers linked to inventory records has made continuous reviews easy. At each review, a decision is made about a SKU’s inventory position. If it is judged to be too low, the system triggers a new order. The inventory position (IP) measures the SKU’s ability to satisfy future demand. It includes scheduled receipts (SR), which are orders that have ...

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