Management methods of material reserve quotas:

1. Quantitative control method and capital control method

(1) Quantitative control method. That is, the procurement is organized based on the material inventory provided by the warehouse management personnel. When the inventory is close to or equal to the insurance reserve, the warehouse manager sends a signal to organize the purchase. Issues that should be paid attention to when using this method;

First, based on the statistical data of material collection, consumption, and inventory, predict resources and demand trends, proactively coordinate with the supplier, and strive for the appropriate supply cycle and batch.

Second, the plan for ordering materials should be connected with the production and operation plan to make decisions on material reserve control.

Third, the supply department should use material reserve quotas as one of the basis for planning, ordering, and storage work.

(2) Fund Control Law. Control the reserve amount according to the quota of material reserve funds. The reserve funds are distributed to planning and purchasing personnel on a monthly or quarterly basis according to the ordering tasks of materials, and rewards and punishments are carried out according to the economic responsibility system, which has obvious economic effects.

2. Regular ordering and quantitative ordering methods

The control of reserve quantity is related to the purchasing method. Therefore, to do a good job in material reserve management, attention should be paid to the purchasing method.

(1) Regular ordering method. Also known as the regular inventory method ordering method, the ordering time is determined in advance, and the order quantity is calculated as follows:

Order quantity = average daily demand × (number of purchasing or ordering days + number of supply interval days) - futures quantity + Insurance reserve quantity

The purchase or order date includes the time required from the issuance of the order order to the acceptance of the materials into the warehouse. Futures quantity refers to the quantity that has been ordered but has not yet been delivered but can be delivered within a few days between supply intervals.

(2) Quantitative ordering method. That is, when the inventory drops to a certain level (order point), an order will be placed with the calculated fixed quantity. The key to the order point is to calculate the reserve quantity at the order point.

The so-called "order point" is the limit when the inventory of materials drops to the quantity that must be ordered again. The quantity in stock when an order is placed is called the "order point quantity". It is determined based on factors such as insurance reserves, order days, and average daily demand. The calculation formula is:

Ordering point quantity = average daily demand × number of ordering days + insurance reserve quantity

Reasonably determining the ordering point is an important measure to maintain reasonable material reserves. Under certain conditions, if the order point is set too high, the material reserves will be too much, thereby increasing storage costs; if the order point is set too low, the material reserves will be too small, thus affecting the normal production.