Theory 109/Supply chain cycle/Onset phase
Reordering Starts on a Stock Ratio
The claim
A supply chain reorders when the ratio of stock to lead-time demand falls below one, so the trigger is coverage rather than level.
01Mechanism
Safety stock is set in units of lead-time demand; the ratio sets the trigger.
02Prediction
Orders should track the ratio.
03Refutation
Orders tracking sales would remove lead time.