Reorder, Expedite or Transfer? Fixing a Projected Stockout

A projection says a SKU will run out at one warehouse in nine days. The reflex is to raise a purchase order. Sometimes that is right. Sometimes it double-orders stock that is already on a truck, or waits two weeks for a supplier when another warehouse has plenty sitting idle.

First, project stock day by day

Start from available stock, subtract expected daily demand, and add each inbound purchase order on the day it is due to land. The first day the balance would go below zero is the projected stockout date. Look far enough ahead to cover the supplier's lead time plus your review period — anything you order today can't arrive sooner than that.

Then choose one of three fixes

• Reorder — there is no PO already in transit for this SKU and warehouse. Cut a new purchase order, sized to bring stock back above the reorder point.
• Expedite — a PO exists, but it is due to land after the projected stockout date. Ordering again would double up; the fix is to pull the existing order forward.
• Transfer — another warehouse holds more than it needs for its own demand and can cover the gap without waiting for the supplier at all.

When is a transfer safe?

Only move stock a sibling warehouse can genuinely spare. Work out what that warehouse needs to stay above its own safety stock over the same horizon, and only offer the surplus beyond that. Otherwise the transfer just moves the stockout from one building to another.

Worked example

Illustrative numbers for one SKU across two warehouses:

Warehouse A: 180 on hand, 20/day demand → runs out on day 9
Open PO for 500 units due to land at A on day 14 (after day 9)
Warehouse B: 900 on hand, 10/day demand, safety stock 60

Reorder? No — a PO already exists.
Expedite? Yes, if the supplier can land it by day 9.
Transfer? B needs about 14 × 10 + 60 = 200 through day 14,
  so ~700 units are spare; sending 100 covers A until the PO lands.

In practice the right answer is often a small transfer now plus a firm conversation with the supplier about the late PO — which is where OTIF history helps.

Why the projection and the alert must agree

If the chart a planner looks at and the rule that raises the alert use different math, people stop trusting both. Build them from the same day-by-day walk so the chart shows exactly why the alert fired.

Supply Chain Manager does this walk for every SKU and warehouse, labels each problem as reorder, expedite or transfer, and draws the projection so you can check it. Suggested purchase orders are one click away when a reorder is the answer. To see it on sample data, open the live demo.