Chapter 3 Revision System
The inventory control systems are intend to know when and how much should be ordered or produced. This book analyze two different revision systems: continuous and periodical.
3.1 Revision System: Continuous
The continuous revision system is when the inventory level is reviewed all the time, it means that the system will know immediately once a unit goes into or out of inventory. As a result, the system will know at once if it is necessary to order or produced another lot. Since the revision is performed constantly, the need for a safety stock is reduced and it is only necessary to cover possible shortages in the Lead Time (time between when the order is placed and this order arrives).
3.2 Revision System: Periodical
The periodical revision systems is when the inventory level is reviewed at certain points in time and not constantly. This time interval between reviews of the inventory level is designated as \(T\). With periodical revision systems, the time analyzed (because its uncertainty), is the time interval between reviews and the Lead Time (\(\tau\)): \(T + \tau\) (Axsäter (2015)).