n the early 1940s, western economists proposed OPM (order point method) theories by the research on consumption rules of stock material over time.

Order point method has following characteristics:

(1) Demands for a variety of materials are independent of each other.

OPM thinks that materials are independent of each other so that we can determine order separately for each material. Therefore, the material of OPM is parts-oriented rather than product-oriented. However, manufacturing requires that all materials number must be matched in order to be assembled into a product. Because of the independent predict and order of material, there will be extra materials during the assembly.

(2) Continuity of material requirements.

OPM thinks that material requirements are relatively uniform and the inventory consumption is stable. But assembly the requirements for parts and components manufacturing in Assembly Manufacturing are uneven and unstable, and the inventory consumption is intermittent. Even if the final demand for product is continuous, the bulk of the components and raw materials demand is not continuous caused by needs of the production process. This phenomenon raised the question of how to determine the time.

(3) Lead Time is known and fixed.

Order point method thinks that lead time is known and fixed, but it is not actually true. For example, an 8-week-lead-time material’s actual lead-time can change between the 4-90 day ranges. To determine such a large time span into a fixed number is clearly unreasonable.

(4) Stock should be re-filled after consumption.

According to this provision, when the material below the order point, an order notice must be issued so as to refill the inventory. However, if the demand is not continuous, then this is not only unnecessary but also irrational.

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