There are essentially two ways that companies express their inventory control settings: either as MAX- MIN (sometimes MIN-MAX) or ROP-ROQ.
Some people will say that it doesn’t really matter which you use, just as long as you understand the definitions and the pros and cons. However, in my experience it does matter and this is one aspect of spare parts inventory management that you really do need to get right.
This article covers:
- The definitions of Min, Max, ROP, and ROQ
- Why the differences are meaningful and important
- The pros and cons of using each
- Why you need to get this right
- Links to further reading