INVENTORY REPLENISHMENT
Base-stock method
A base-stock policy replenishes inventory position toward a target. The position normally considers on-hand stock, outstanding replenishment and relevant demand commitments under the model used.
BASE-STOCK METHOD IN PRACTICE
- Define the positionState which stock and demand components count.
- Set the targetMatch the demand and lead-time model.
- Replenish the gapInclude open orders and policy constraints.
Use the agreed units, actual records and approved procedures for your operation.
A WORKED EXAMPLE
60 on hand + 30 on order − 10 backordered.
Under a simplified definition, 60 on hand plus 30 on order minus ten backordered gives an inventory position of 80. With a target of 100, order 20 before lot-size or other constraints. Ordering 40 based only on physical on-hand stock would ignore the incoming supply and demand already included in the position.
WHAT THIS MEANS FOR YOUR QUOTE
Agree the requirement before comparing quotes
Use the actual shipment, stock and service requirements. Record the billing unit, included work and responsibility for exceptions.
Put this term to work. Use the 3PL selection guide to turn these operating requirements into provider checks, and the 3PL RFP guide to document evidence, responsibilities and exceptions.
A LITTLE MORE CONTEXT
Questions about Base-stock method
Is base stock the same as safety stock?
No. The target concerns total position under a policy; safety stock addresses uncertainty within a planning approach.
Does a base-stock target guarantee no shortages?
No. Demand and replenishment uncertainty remain.
Should replenishment use on-hand stock alone?
Not for an inventory-position policy. Include the defined supply and demand components.
Source & example notes
MIT OpenCourseWare: inventory and base-stock policies.
Sources provide background on the linked topic. Product documentation describes a particular implementation; confirm the rules, contract and procedures that apply to your operation.
Quantities, costs and scenarios are illustrative, not operating targets, approved handling instructions or guarantees. Source guidance reviewed 22 October 2026.
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