What do we mean by Fixed order quantity?

The system that controls the inventory levels of a supply chain is called fixed order quantity, where in maximum and minimum levels are fixed. When the inventory level reaches the auto set reorder point, then fixed amount of inventory can be replenished.FOQ helps to reduce the reorder mistakes, manages the storage capacity efficiently and prevent the unnecessary blockage of funds.

The Fixed Order Quantity (FOQ) is the inventory control system, wherein the maximum and minimum inventory levels are fixed.

An inventory management system in which replenishment stock is ordered when the stock reaches a reorder point and the replenishment quantity is kept fixed irrespective of external circumstances. It is termed as Fixed Order Quantity.

The fixed order system has been used for some time and keeps stock levels fairly stable. As a result this ensures that there are no stock outs unless there is a great level of fluctuations in demand.