Describe traditional systems used to calculate purchase quantities.

Quantities of perishable products to be used immediately can be easily calculated by subtracting the quantity in inventory from the quantity needed for the order period.

Par inventory systems are based on the number of purchase units required to return inventory to predetermined levels. Calculations involve subtracting cases in inventory and cases used between order placement and delivery from the required par level.

Minimummaximum inventory systems are used to purchase nonperishable and expensive products. Buyers must determine the minimum quantity below which inventory levels cannot fall and the maximum amount above which inventory cannot rise. Buyers must know each product's purchase unit, usage rate, order period, lead time, safety level, and order point.

Other methods for determining purchase quantities include the exact requirements system, periodic ordering system, cooperative (pool) buying system, and economic order quantity (EOQ) system. Some buyers also use definite quantity contracts, total requirements contracts, open market purchasing, and vendor-managed par systems.

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