Quick Summary: The Recommended Order Quantity (ROQ) is calculated by comparing your Net Stock to the ideal ordering levels, converting those levels from days into units, and then applying any supplier constraints such as Minimum Order Quantities (MOQ) or Order Multiples.
What Is the ROQ?
The Recommended Order Quantity (ROQ) is a data-driven calculation, not a fixed value.
The app calculates it for every stocked item, based on the most recent demand forecasts, supplier performance, and stock positions.
The ROQ answers one question:
“How much must I order today to reach my target stock level for the cover forward period?”
How ROQ Is Calculated
The Inquiry screen contains three areas that determine the ROQ:
Ideal Levels: Displayed in days on the Policy panel (SS, LT, RC).
Net Stock: Displayed on the Inventory Position panel.
Supplier Constraints and Order Recommendation: Displayed on the Status panel.
Understanding these three areas explains all ROQ results.
Ideal Levels in Days
The app calculates two ordering levels in days:
Reorder Point (SS + LT): When to order.
Order Up To Level (SS + LT + RC): How much to order.
➜ For more on this topic, read: Ordering Levels Explained
Converting Days to Units
Ordering levels expressed in days convert into units using the forecast:
Units = Days × Daily forecast
The same number of days may convert into different unit quantities depending on the demand environment. Items may also include multiple demand streams:
Sales Forecast
Distribution Forecast
BOM Forecast
These streams appear further down the Inquiry screen on the CW and BOM tabs.
➜ For more on these topics, read: Cover Forward Period Explained and Demand Streams Explained: Sales, Distribution, and BOM
Determining Net Stock
Net Stock represents the true inventory position because it adjusts for what is committed and what is incoming.
Available stock = Stock on hand − Back orders − Allocated stock
Net stock = Available stock + On order
Back orders and allocations appear on the Sales Orders tab.
Stock on order appears on the Purchase Orders tab.
Calculating the Ideal Order
For stocked items, the ROQ is calculated as follows:
If Net Stock < Reorder Point → ROQ = Order Up To Level − Net Stock
If Net Stock ≥ Reorder Point → ROQ = 0
ROQ Example 1:
Reorder Point Units = 70
Order Up To Units = 90
Net Stock = 60
Ideal Order
= Order Up To Units - Net Stock
= 90 − 60
= 30 units
ROQ Example 2:
Reorder Point Units = 70
Order Up To Units = 90
Net Stock = 80
Ideal Order
= 0 units (Because the Net Stock is not less than the Reorder Point).
Applying Supplier Constraints
Supplier constraints adjust the Ideal Order:
Minimum Order Quantity (MOQ)
Order Multiple (OM)
➜ For more on this topic, read: Supplier Constraints Explained
Constraints Example 1:
If the ideal order is calculated as 800 units, but the supplier specifies:
Minimum Order Quantity (MOQ) = 1,000 units
Order Multiple (OM) = 120
The system will recommend 1,080 units (nine packs) to comply with both constraints.
Non-Stocked and Obsolete Items
Non-stocked items
Do not use Reorder Points or Order Up To Levels.
A Recommended Order is only generated when Net Stock < 0.
The target is Net Stock = 0, although constraints can create a positive Net Stock.
Obsolete items
Never receive a Recommended Order, regardless of stock levels or policies.
Missing Recommended Orders Explained
⚠️ Watchouts
Net Stock is not Stock on Hand: Recommended Orders use Net Stock, which adjusts for back orders, allocations, and stock on order. Reviewing only Stock on Hand leads to incorrect interpretation of order behavior.
Supplier constraints can increase the final quantity: Minimum Order Quantities and Order Multiples replace the Ideal Order with a higher constrained value and often explain unexpectedly large orders.
Non stocked and obsolete items use different logic: Non-stocked items only generate Recommended Orders when Net Stock is below zero. Obsolete items never generate Recommended Orders.
💡 Tips
Review Safety Stock, Lead Time, and Replenishment Cycle first: These values usually explain Recommended Orders that appear too large or too small.
Check all demand streams: Distribution and BOM demand may increase the Total Forecast and raise the Order Up To Level.
Validate Net Stock drivers: Confirm back orders, allocations, and purchase orders before adjusting policies.
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