Inventory planning
Periodic Review System
By the Supply Chain Manager team · Updated October 16, 2026
A periodic review system checks stock at fixed intervals, such as every Monday, and orders enough to bring each SKU up to a target level.
It is also called a fixed-interval or order-up-to system. Because orders go out on a schedule, it suits suppliers with weekly delivery runs and makes it easy to group many SKUs from the same supplier onto one purchase order.
The trade-off is that a SKU can fall dangerously low between reviews, so the target level has to cover demand for the review period plus the lead time.
How to calculate periodic review
Order-up-to Level = Average Daily Demand × (Review Period + Lead Time) + Safety Stock Order Quantity = Order-up-to Level − Inventory Position
Periodic review example
Illustrative numbers: 20 units a day, weekly review (7 days), 5-day lead time, 60 units of safety stock. Order-up-to level = 20 × 12 + 60 = 300. If inventory position on review day is 110, order 190.
Why periodic review matters for distributors
Most distributors order from each supplier on a rhythm anyway. Formalizing it as a periodic review makes order sizes consistent and helps hit freight minimums and quantity breaks.
Common periodic review mistakes
- Covering only the lead time and forgetting the review period.
- Skipping a review cycle without adjusting the next order.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.