Category: Business CentralRead time: 5 MinsPublished on: 4 Dec 2025

Reordering Policy in Business Central

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Managing inventory efficiently is one of the biggest challenges for any distribution, retail, or manufacturing company. In Microsoft Dynamics 365 Business Central, the Reordering Policy determines how and when items are replenished, influencing stock availability, working capital, and operational efficiency.

Whether you are a Business Central consultant, functional analyst, or operations manager, understanding these policies is crucial for implementing accurate planning, forecasting, and automated purchasing and supply processes.

In this guide, our Business Central consultants have listed each reordering policy, when to use it, common mistakes, and best-practice recommendations for real-world implementations.

1. What is a Reordering Policy in Business Central?

In Business Central, the Item Reordering Policy calculates how and when the system should suggest replenishment. It informs:

  • When should the item be reordered?
  • How much should be ordered?
  • Should supply be created from purchase, transfer, production, or assembly?
  • Should demand be aggregated or planned individually?

It controls how the Planning Worksheet and Requisition Worksheet generate supply orders.

2. Types of Reordering Policies in Business Central

  1. Fixed Reorder Quantity

    This is one of the most used policies in Business Central because it provides predictable replenishment. The system orders a fixed quantity (Set from the reorder quantity field) whenever inventory drops below the reorder point.

    Use this policy when:

    • Demand is stable.
    • You reorder in consistent batch sizes (e.g., cartons, pallets).
    • Inventory strategy uses min/max or safety stock thresholds.

  2. Maximum Quantity

    This policy brings inventory up to a maximum inventory level whenever stock breaks below the reorder point. When stock falls below the threshold, Business Central orders the difference between the current inventory and the maximum quantity.

    Use this policy when:

    • Ideal for low-cost or fast-moving items where overstocking is not risky.
    • You want to maintain a stable maximum/minimum stock model.
    • Items have predictable and low variability.

  3. Lot-for-Lot (LFL)

    This is the most dynamic and “responsive” policy. Business Central creates supplies to match demand during a defined period. The system identifies demand within the Reorder Cycle (e.g., weekly, or monthly) and creates exact supply quantities for that period.

    Use this policy when:

    • Demand fluctuates frequently.
    • You want planning to be demand-driven.
    • Great for batch-based or periodic planning.
    • Manufacturing items where production should match demand.

  4. Order Policy

    This is a simple policy where each demand creates one supply order. The system suggests an order only when there’s actual demand (from sales, production, and more).

    Use this policy when:

    • Items are non-stock or drop-shipped.
    • Suited for make-to-order or one-off items.
    • You manufacture or purchase only when required.
    • The item is expensive, custom, or slow-moving.

Each policy affects how Planning Worksheets or Requisition Worksheets generate purchase or production suggestions, so choosing the right one ensures your inventory stays balanced.

3. Understanding Inventory Reordering Policies in Business Central with Practical Scenarios

  1. Fixed Reorder Quantity

    Scenario:

    A computer accessories shop sold USB keyboards steadily, around fifty units a month throughout the year.

    • Note: The item has a reordering policy as ‘Fixed Reorder Qty.,’ reorder point as ‘25’, and Reorder quantity of ‘50’.
      A sample screenshot of fixed reorder quantity policy in Business Central.
    • Search and navigate to the ‘Requisition Worksheets’ page for calculating the plan.
      A sample screenshot of requisition worksheets under fixed reorder quantity policy in Business Central.
    • Enter the date range (since we are calculating based on the actual date).
      A sample screenshot containing plan calculation under fixed reorder quantity policy in Business Central.
    • Below is the result:
      A sample screenshot of fixed reorder quantity policy in Business Central containing pre-filled requisition worksheet.

  2. Maximum Quantity

    Scenario:

    When inventory falls to fifty, the system will suggest ordering two hundred bolts (to refill up to 250).

    • The item has a reordering policy as ‘Maximum Qty.,’ reorder point as ‘50’, and Maximum inventory as ‘250’.
      A sample screenshot of maximum quantity policy in Business Central.
    • The Maximum Quantity follows the same reordering policy as the Fixed Reorder policy for calculating the plan. Below is the result:
      A sample screenshot of requisition worksheets under maximum quantity policy in Business Central.

  3. Order

    Scenario:

    You purchase the item only when there is a requirement. A customer raises a request needing sixty water heaters.

    • Note: The item has an ‘Order’ reordering policy, and you can see that the reorder parameters are blocked.
      A sample screenshot of planning interface under order quantity policy in Business Central.
    • A sample screenshot of sales order worksheet under order quantity policy in Business Central.
      A sample screenshot of requisition worksheets under maximum quantity policy in Business Central.
    • The Order policy follows the same reordering policy as the Fixed Reorder policy for calculating the plan. Below is the result:
      A sample screenshot of requisition worksheets under order quantity policy in Business Central.

  4. Lot-for-Lot

    Scenario:

    Throughout the week, multiple jobs require forty water heaters on 4th November and 30 water heaters on 7th November.

    • The item has a ‘lot-for-lot’ reordering policy, and you can see that the reorder parameters are blocked.
    • Note: Lot accumulation period is ‘4D’. While planning, 4 days from the start date, the demand will be accumulated and processed.
      A sample screenshot of planning stocks under lot-for-lot reordering policy in Business Central.
    • A sample screenshot of sales order worksheet under order quantity policy in Business Central.
      A sample screenshot of requisition worksheets under maximum quantity policy in Business Central.
    • Create a demand (sales order) for this item with a quantity of forty.
    • Create another demand (sales order) for this item with a quantity of thirty.
      A sample screenshot of sales order under lot-for-lot reordering policy in Business Central.
      A sample screenshot of sales order dashboard under lot-for-lot reordering policy in Business Central.
    • Enter the date range (since we are accumulating the orders for 4 days).
      A sample screenshot of planning screen under lot-for-lot reordering policy in Business Central.
    • Below is the result:

      * We can see the orders are accumulated, and the resulting quantity is 70 [40+30]. If the policy is ‘Order,’ there will be two lines instead of a combined line with quantity as ‘70’.

      A sample screenshot of requisition worksheets under lot-for-lot reordering policy in Business Central.

4. Optimize Inventory Planning with the Right Reordering Strategy

Choosing the appropriate Reordering Policy in Business Central is critical for maintaining stock accuracy, reducing carrying costs, and ensuring product availability. When configured correctly, BC automates replenishment, minimizes stockouts, and supports efficient operations across procurement and production.

Contact our experts if your business needs guidance on how to structure reordering, forecasting, or planning parameters. Our certified consultants ensure your inventory setup aligns with industry best practices, enabling accurate, scalable, and automated supply planning.