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Interpret the suggested replenishment

Understand the order quantity (Q) the system suggests and how it is adjusted by MOQ.

By the end of this tutorial you will know how to read the suggested quantity Q, understand when Q = 0 is a correct result, how MOQ affects the final quantity and what happens when you modify Q manually.

For the formal definition of each inventory metric, see the Inventory metrics reference.

What you will need​

  • The simulation panel for a SKU open (with the k factor already configured, ideally the optimal one).
  • Knowledge of the SKU's on-hand inventory and in-transit inventory.

Step 1 — Understand how Q is calculated​

The suggested replenishment quantity follows this formula:

Q = Target Stock − (On-hand inventory + In-transit inventory)
Q = max(Q, 0)   ← never negative
  • Target Stock: the level the system wants to bring inventory to. Calculated by the simulation based on the chosen k factor.
  • On-hand inventory: units physically available in the warehouse right now.
  • In-transit inventory: units already ordered from the supplier that have not yet arrived.

The logic is simple: if your current position (on-hand + in-transit) already exceeds the target stock, you do not need to order anything.

Step 2 — Read the suggested quantity in the panel​

In the SKU detail panel, locate the Suggested replenishment section:

  • Q (before MOQ): the net quantity calculated by the formula above.
  • Adjusted Q (with MOQ): the actual quantity to order after rounding for MOQ.
  • Target Stock: the target level calculated by the simulation.
  • Resulting fill rate: estimated fill rate if you order exactly the adjusted Q.

TODO: screenshot of the suggested replenishment panel with Q, adjusted Q and fill rate

Step 3 — Interpret Q = 0​

When the suggested quantity is zero, there are two possible interpretations:

a) Your inventory is already above the target stock​

Your current position (on-hand + in-transit) exceeds the target stock. The system does not recommend ordering because you already have enough coverage. This is a correct and expected result; no action is needed.

b) You recently received a large order​

If an order recently arrived, your on-hand inventory rose and may have temporarily exceeded the target. Q = 0 will continue to appear until consumption brings the stock back below the target.

Q = 0 is not always an alarm

Q = 0 does not mean the system is broken or that the SKU is unmanaged. It means you have enough coverage today. Check again once consumption has brought the inventory below the target.

Step 4 — Understand the MOQ adjustment​

MOQ (Minimum Order Quantity) is the minimum quantity your supplier accepts per order. The system adjusts Q as follows:

If Q_net > 0:
    Q_adjusted = ceil(Q_net / MOQ) × MOQ
If Q_net = 0:
    Q_adjusted = 0

In plain terms: if you need to order anything, the quantity is rounded up to the nearest multiple of MOQ. It is never rounded down, because doing so would leave inventory below the target.

Example:

Q_net = 230 units. MOQ = 100. The system suggests Q_adjusted = 300 (the next multiple of 100 above 230). Ordering 200 would leave inventory 30 units below the target.

The MOQ adjustment can raise the fill rate

Ordering Q_adjusted instead of Q_net generally raises the estimated fill rate because it brings inventory slightly above the target. The panel shows the resulting fill rate with the adjustment applied.

Step 5 — Modify Q if needed​

The system allows you to modify the suggested quantity. This is useful when:

  • You want to order less due to budget or space constraints.
  • You want to take advantage of a volume discount and order more.
  • There are external factors the model does not know about (upcoming supplier closure, planned promotion, etc.).

To modify Q:

  1. In the Order quantity field, clear the suggested value and enter the new one.
  2. The simulator automatically recalculates the fill rate and total cost resulting from the new quantity.
  3. Review the impact before confirming. If the fill rate falls below your company's acceptable threshold, evaluate whether the savings justify the risk.

TODO: screenshot of the editable quantity field with real-time recalculation

Step 6 — Generate the order​

Once you are satisfied with the quantity:

  1. Click Generate order (or the equivalent button in your configuration).
  2. The order is recorded and the in-transit inventory is updated.
  3. In the next simulation, the system will subtract that transit quantity from Q for that SKU.

TODO: screenshot of the "Generate order" button and confirmation

Result​

You know how to read the suggested quantity Q, understand why it can be zero, know the effect of MOQ on the final quantity and know how to modify Q to evaluate alternative scenarios before generating the order.

You have completed the optimization tutorials. To go deeper into the theory behind these calculations, see the Inventory optimization concepts.