Learn How To Calculate The Reorder Points In A Indian Restaurant

Necessity Of Inventory

It is necessary for the restaurant owner to optimize the ordering process to make sure that their business has the right amount of inventory it requires to meet its demand. Apart from that, it also helps them reduce the dead or surplus stock, which can proceed to profit losses.

You would be required to determine the reordering level (it is also known as the PAR level) in order to help evaluate when you would have to reorder your beverage and food inventory items.

Only a minimum amount of stock you can have on hand for some specific food before your Indian Restaurant in Sydney needs to reorder. This procedure will help you not decrease the gap in your inventory, which in short maximizes the storage use while also ensuring that you meet the demand of the customer without any complaint.

 Record Your Reorder

There will be certain cases wherein the reorder points might stay stable, but more often than not, they will for sure fluctuate because of the seasonality and the increase in demand. This means that you should have a record of all the products, how much you require of each product, and if any sales trends are going on at that moment. In case you are using a Restaurant in Terrigal inventory management software, you can easily obtain this information with the help of built-in reports.

 Calculate Your Reorder

If you are not using the restaurant inventory management software, you will have to calculate the points of reorder with the help of a formula. Even if you are calculating the reorder point in the management software, make sure to look up the formula and have a clear understanding of how that works so that you would have a better understanding of the insights of the restaurant business.

 Record Point = (Average Lead Time * Average Daily Time) + Safety Stock

The average number of bottles of a particular product that you sell each day is the average daily usage. You can pull average daily sales from a Point-Of-Sales (POS) System if you use them. And in case you do not, you can take the inventory numbers for each item and then take the days between inventory counts to divide them.

Lead time is basically the time that it takes for you to reorder the product and then add it to the inventory. You would have to use a formula to calculate it. In case you are producing your own products, then the formula would be somewhat like this:

Total Lead Time = Manufacturing Time + Procurement Time + Shipping Time.

 And if you are buying the items from the wholesalers and then selling them to your customer, then the formula would go somewhere along this line:

 Total Lead Time = Procurement Time + Shipping Time

 Safety Stock

Safety stock is generally a number of bottles you would want to have in stock if the order is somehow the demand is higher than you had expected or if they delayed the order. And make sure you list all this in the spreadsheets and update it regularly.

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