In this article we will explain the configuration options for using a Just in Time strategy to calculate stock limits to hold an ideal amount of stock according to its rate-of-demand. 

Click on the Stock Strategy button to pop-out the strategy panel: 

By default the strategy will be set to 'No change, use existing' and the stock limits initially loaded in the modelling grid will be the existing stock limits saved against each product and warehouse. 

You can select which strategy you want to use here. Let's explore the 'Just in Time' strategy: 

You will now have the parameters available to configure your strategy to be ideal for each products lead time and rate of demand:

How the Reorder Point works in the Just-in-Time strategy in Modelling
The Just-in-Time strategy calculates the min and max stock limits by taking the Lead Days + Min Days Buffer and multiplying this minimum number of days of stock you want to have by the rate of demand. 

For example, the first row of the modelling grid may have a product that takes 7 days to arrive and you want to add a minimum buffer of 7 days to organise a purchase order, then your reorder point will be when you have 14 days of stock left (on average). If you sell 5 per day as a rate of demand, then you will have a min stock limit of 70 units.
(7 days + 7 days) x 5 = 70 units min stock limit. 

The second line of the modelling grid may be a product with a 90 day lead time because it comes from a different supplier. It sell 1 per day on average. The Just-in-Time strategy will calculate the min stock limit with the same formula as: 

(90 days + 7 days) x 1 = 97 units min stock limit. 

Even though both products different lead times, the usage of the Just-in-Time strategy means the stock limit calculations are tailored per product. This is the key difference between the Just-in-Time strategy and the Stock Days strategy, where lead days is not considered. 

How the Max Stock limit is calculated in the Just-in-Time strategy in Modelling

The example strategy we have set above is for a Max Days Buffer of 7 days of stock. This is the amount of stock want to order up to when we reach the reorder point. 

The first product in the grid has a rate of demand of 5 units per day, the Max Stock limit would be 35 units above the Min Stock limit. 

70 (min stock) + (7 x 5) = 105 units max stock limit.

Pressing the Calculate button will update all the min and max stock limits for the products in the modelling grid with new values, displayed in bold. 

You are able to edit these values directly, if you wish. Once you are happy with the calculations, you can Submit your changes and set a review timer, using the Submit button in the top right corner.