Periodic review, written (R, S), checks stock at fixed intervals and orders, at each review date, enough to climb back to an order-up-to level S. Orders are therefore variable in size but predictable in timing, exactly the opposite of continuous review. That predictability has a precise, computable price: the buffer must cover not the lead time alone, but the review period plus the lead time.
Why it matters
Continuous review optimises stock, but it produces orders at unpredictable moments. Yet a supply chain does not live on stock levels alone: it lives on trucks to fill, routes to organise, suppliers who negotiate better when they know the rhythm, teams who process orders in waves. Periodic review answers that reality by imposing a calendar.
The principle is to check stock on fixed dates, every Monday, every fortnight, every month, and each time order enough to climb back to a target level. The direct consequence is that you know when orders will go out, which makes it possible to group them. This is the decisive argument when several references come from the same supplier or ride the same transport: you reach free-shipping thresholds and fill trucks instead of multiplying partial shipments.
This regularity has a cost, and it is perfectly quantifiable. Between two reviews, nobody is watching. If demand accelerates just after a check, stock falls with nothing being triggered, and you must hold out until the next review, then through the delivery lead time as well. The window of vulnerability is therefore no longer the lead time alone but the review period added to the lead time, which mechanically thickens the buffer.
The trade-off is thus explicit: you pay in stock to buy predictability and transaction savings. Depending on the reference, that trade is excellent or ruinous. On inexpensive items ordered from a shared supplier, it almost always wins. On high unit-value references, the extra buffer costs more than the grouping savings.
The point most often missed is that the review period is itself an economic decision, of exactly the same nature as lot size. A tight review multiplies orders and their fixed costs but lightens stock; a spaced-out review does the opposite. The economic-lot logic applies directly, and the optimal period is in practice the one that reproduces the economic order quantity.
In reality, that period is almost always set by the calendar rather than by calculation. It is monthly because the meeting is monthly, weekly because the week structures the company. This is not absurd, synchronising with internal rhythms has value, but it deserves to be verified rather than endured.
The expert lesson: treat the choice of period as a documented trade-off. Price, on one side, the extra buffer each week of interval creates; on the other, the gains from grouping, negotiation and operational simplicity. In most portfolios this exercise leads to shortening the period on high-value references and lengthening it on the long tail, rather than keeping one rhythm for everyone.
The mechanism
The operation takes two gestures. On each review date, you read the stock position, that is, physical stock plus what is already on order minus commitments. You then order the difference between that position and the order-up-to level S. If the position is high, the order is small; if demand has been strong, the order is large. The rhythm is fixed, the volume adapts.
Everything therefore rests on computing the target level. It must carry you until the next order is delivered, that is, through the review period and then through the lead time. It is made of the expected consumption over that window, plus the safety stock computed on that same window. The difference with continuous review lies there, and it is total: you replace the square root of the lead time with the square root of the lead time plus the period.
The signature above shows the effect. The ticks on the axis mark review dates, always regular. The horizontal line is the target level: the more you space out reviews, the higher it climbs, because it must cover a longer interval. The teeth become wider and taller, which means fewer orders but higher average stock.
A useful refinement in practice: the review period need not be identical for every reference. You can group items by supplier or by route and give each group its own rhythm, which preserves grouping savings where they exist while avoiding a thick buffer on references that draw no benefit from it.
The traps
This is the silent error par excellence, often inherited from a migration off a continuous policy. The threshold looks right, the formulas seem in place, but the window actually to cover has grown by the whole review period. Service degrades months later, with no apparent cause.
A monthly review because the meeting is monthly is not a trade-off. The period drives both the number of orders and the thickness of the buffer: it obeys the same economic logic as lot size and deserves to be priced, then differentiated by reference family.
A rigid calendar becomes dangerous when demand surges right after a review. Without an exception procedure allowing an off-calendar trigger on alert, you watch stock melt knowing nothing will ship before the scheduled date. Regularity must remain a rule, not an absolute constraint.
The rollout
Add the intended review period and the real lead time, variability included. It is this sum, not the lead time alone, that underpins every calculation that follows.
Weigh the cost of the extra buffer each week of interval creates against the gains in grouping, transport and administrative simplicity. Keep the period that minimises the total, not the one that suits the diary.
Apply the formula over the full window to obtain S, then check the result stays compatible with storage capacity and shelf-life constraints.
Align the review dates of references sharing a source or a transport, so as to convert predictability into thresholds reached and trucks filled. This is where the cost of the buffer is recovered.
Define the alert threshold that authorises an off-calendar order and who may trigger it. Without that valve, the discipline of the rhythm is paid for in stockouts on heavy-demand days.
Neighboring concepts
From knowledge to action
Every week of interval between reviews thickens the buffer of every reference concerned. Our Inventory & distribution file prices that trade-off and differentiates rhythms by family.