Reordering Policies and Planning in Business Central, Explained
By Kaspar Kasper, Founder & Senior Solution Architect· 3 min read
The planning engine in Business Central can replace a lot of spreadsheet work for buyers and production planners. It looks at demand, supply and each item's planning parameters, then proposes purchase orders, production orders and transfers with action messages. Most of the frustration teams have with it comes from parameters that were never set deliberately. Here is how the pieces fit together.
Where planning happens
- The planning worksheet plans across purchasing, production and transfers. It is the main tool for manufacturers.
- The requisition worksheet plans purchases and transfers only, and suits distributors who do not use production orders.
- Calculate Regenerative Plan recalculates everything from scratch; Calculate Net Change Plan only considers what has changed since the last run.
- Carry Out Action Message turns accepted suggestions into real orders.
The four reordering policies
The Reordering Policy on the item card (or stockkeeping unit) decides how the planning engine sizes and times supply.
| Policy | How it works | Good for |
|---|---|---|
| Fixed Reorder Qty. | When projected inventory falls below the reorder point, suggests the fixed reorder quantity (or multiples of it). | Stable, high-volume items with economic order quantities. |
| Maximum Qty. | When projected inventory falls below the reorder point, suggests enough to bring it back up to the maximum inventory. | Items with storage limits or min/max stocking practices. |
| Order | Creates one supply order for each demand, matched one-to-one. | Make-to-order and engineered items, expensive or customer-specific parts. |
| Lot-for-Lot | Groups the demand within a time period into one supply order, sized to the net requirement. | Most components and purchased materials in manufacturing. |
The first two are reorder-point policies: they react to projected inventory levels. Order and Lot-for-Lot are demand-driven: they react to actual demand from sales orders, production components, forecasts and transfers.
The parameters that matter most
- Reorder Point: the projected inventory level that triggers a suggestion for reorder-point policies. Should cover expected demand during the lead time plus safety stock.
- Safety Stock Quantity: a buffer the planning engine tries to protect. It is treated as demand, so stock is replenished before it is touched.
- Lot Accumulation Period: for Lot-for-Lot, how far ahead to group demand into one order.
- Rescheduling Period: how far the engine may move an existing order in time instead of suggesting a new one.
- Dampener (Period and Quantity): stops the engine from suggesting small, noisy changes to orders already placed.
- Minimum, Maximum and Order Multiple: modifiers that round suggested quantities to what suppliers and production can actually handle.
- Lead Time Calculation and Safety Lead Time: drive when orders must be placed to arrive on time.
Demand the engine sees
Planning only works with demand that is in the system: sales orders, production order components, transfer orders, service and project demand, and, if you use them, demand forecasts. If sales routinely confirm orders by email before entering them, or forecasts live only in Excel, the planning worksheet will always look wrong. Fixing that habit is usually worth more than any parameter change.
Reading the planning worksheet
Each suggestion carries an action message: New, Change Qty., Reschedule, Resched. & Chg. Qty. or Cancel. The Untracked Planning Elements and Order Tracking pages explain why a line was suggested, which is the fastest way to build planner trust: when someone asks "why does it want 500?", the answer is on screen.
A sensible rollout
- Classify items. An ABC or volume/variability split tells you where precision matters.
- Set policies by class, using item templates or bulk updates rather than item by item.
- Get lead times right first. Vendor lead times and production lead times drive every date the engine proposes.
- Run planning side by side with the current process for a few cycles before relying on it.
- Review parameters on a schedule, not only when something goes wrong.
Common reasons planning "doesn't work"
- Inventory or open orders in the system do not reflect reality.
- Every item uses the same default policy and reorder point.
- No dampener, so the worksheet is flooded with tiny reschedule messages.
- Safety stock and reorder point are set as if they were the same thing.
- Planners carry out messages without reviewing them, then lose trust when one is wrong.
Planning design is a core part of our manufacturing and distribution projects. If your planners have stopped trusting the worksheet, talk to an architect.
