Effective Inventory
The system calculates the inventory that is going to be used in the rest of the calculations.
Effective Inventory =
Inventory
+ Quantity on Purchase Order
- Quantity on Sales Order
+ Quantity in Transfer In
- Quantity in Transfer Out
Note: It is possible to set up which document types (Purchase Order, Sales Order, ...) should be considered in the calculation. This can be done in the Replen. Setup page, in the Effective Inventory FastTab.
Average Daily Sale
The calculation of the Average Daily Sale process is executed in the calculation of the Replenishment Item Quantity record. The calculation is based on the defined Sales Profile for the Item, Variant and Location combination.
The calculation process below is applied to every Sales Profile Line:
Quantity
- Calculates the sum of the sold quantity
(CALCSUMS(Quantity)) from the Item Ledger Entries table according to the Date Period.Correction Quantity
- Calculates the sum of the correction quantity as defined in Sales History Adjustments.
(CALCSUMS("Corrected Quantity")) from the Sales History Adjustments table according to the Date Period.Quantity correction
- Corrects the Quantity with Correction Quantity.
(Quantity = Quantity - Corrected Quantity)
Tip: The Quantity field is a negative number. To lower the sale the Corrected Quantity value must be negative.
Other fields in the Replenishment Item Quantity record:
Adjusted Sales = Corrected Quantity
- If the field Stock Out Functionality is set, the system calculates the number of Out of Stock Days for the Date Period
- The system calculates the Average Daily Sales as follows:
Average Daily Sale = -Quantity / (No of Days – No of Out of Stock Days)
No. of Days Out of Stock = No of Out of Stock Days
No. of Sales Dates = No of Days with sales
Average Daily Sale
- Calculates the Average Daily Sale according to the Sales Profile Line Weight
- Average Daily Sale = Average Daily Sales * Weight / Total Weight
- or -- Average Daily Sale = Average Daily Sales * 1 / No of Sales Profile Lines
See Also: Replenishment Sales Profile, Sales History Adjustment, Out of Stock Days.
Stock Cover Days
If the Stock Coverage Days Profile is used, the Stock Cover Days are dynamically calculated based on the next replenishment calculation day and the parameters as defined in the Replen. Coverage Days Profile. The Warehouse Stock Cover Days and Store Stock Cover Days are calculated as follows:
Warehouse Stock Cover Days = No. of Days until Next Calculation Day - Warehouse Closing Days + Inbound Whse. Handling Time + Coverage Buffer Days
Store Stock Cover Days = No. of days until next calculation day - Store Closing Days + Inbound Store Handling Time + Coverage Buffer Days
If the Stock Coverage Days Profile is not used, the system will use the Wareh Stock Cover Reqd (Days) field to replenish a warehouse and the Store Stock Cover Reqd (Days) field to replenish a store.
Stock Cover Days = Store Stock Cover Reqd (Days) -or-Stock Cover Days = Wareh Stock Cover Reqd (Days)
Note: When replenishing a warehouse, the system tries to use the Wareh Coverage Days Profile, or the Wareh Stock Cover Reqd (Days) field, if the profile for the warehouse is not defined. If both of them are empty, the system will look for the Store Coverage Days Profile, or finally, the Store Stock Cover Reqd (Days) field, if the profile for the store is not defined.
See Also: Replen. Coverage Days Profile, Replenishment Batch Calculation Calendar
Forward Sales Profile
The system uses the Store Forward Sales Profile field unless the Replenishment Journal is to replenish a warehouse, in which case it uses the Warehouse Forward Sales Profile field. The Forward Sales Ratio is not calculated unless the corresponding field is filled out.
The system calculates the pre and post date periods specified in the Forward Sales Profile according to the system date (WORKDATE).
If the Use Replenishment Calendar field in the Forward Sales Profile is set, the system will substitute the dates if they are found in the Replenishment Calendar with the days not found in the calendar subtracted by one year (-1Y).
The system sums up the quantity (CALCSUMS("Valued Quantity")) for the periods with filters specified in the Forward Sales Profile record (Division, Item Category, Product Group and/or Location).
The Forward Sales Forecast Factor is found in the following way:
Forward Sales Forecast Factor:= Total Post Period Sale / Total Pre Period Sale
See Also: Forward Sales Profile (Store/Warehouse), Replenishment Calendar.
Cross Docking
If the Journal is to replenish the warehouse with cross docking to the stores, it is necessary to calculate how much should be cross-docked to the stores.
The regular Journal process calculates the System Suggested Quantity according to the Warehouse Stock Cover Days as the Journal replenishes the warehouse.
This additional process calculates the Quantity to Cross Dock for the store using the Store Stock Cover Days.
Quantity to Cross Dock = Average Daily Sales * Store Stock Cover Days - Effective Inventory
Example:
Condition:
- The warehouse has 8 days as Stock Coverage but the store has 3. The system calculates how much the store needs for 10 days.
- Average Daily Sale = 10
- Store Stock Cover Days = 3
- Warehouse Stock Cover Days = 8
- Forward Sale Forecast Factor = 1,1
- Effective Inventory = 5
Result:
- Quantity to Cross Dock = (10 * 3) - 5 = 25
- System Suggested Quantity = (10 * 8 * 1,1) - 5 = 83
- The Quantity in the Purchase Order for the warehouse is 83, but when the Purchase Order is received into the warehouse, the staff cross-dock (pick) the 25 to be delivered by a Transfer Order to the store.
Note: If there is a Planned Sales Demand within the store stock cover period, the Quantity to Cross Dock is adjusted to reflect the Planned Sales Demand.
Suggested Quantity
The system can suggest the quantity that the warehouse or the store needs according to the following formula:
System Suggested Quantity = Average Daily Sales * Required Stock Cover Days * Forward Sales Forecast Factor - Effective Inventory
If the System Suggested Quantity is less than zero, the System Suggested Quantity is set to zero.
If the Effective Inventory is greater or equal to the System Suggested Quantity, the System Suggested Quantity is set to zero.
Note: If there is a Planned Sales Demand within the required stock cover period, the System Suggested Quantity is adjusted to reflect the Planned Sales Demand.
Planned Sales Demand
If there are Planned Sales Demand records for the required stock cover period (warehouse or store), the system sums the quantities from the Planned Sales Demand records, and the System Suggested Quantity will be adjusted to include the Planned Sales Demand quantity.
Demand Quantity = Average Daily Sale * (Required Stock Cover Days – No of Planned Sales Demand Days) + Total Planned Sales Demand Quantity
System Suggested Quantity = Demand Quantity * Forward Sales Forecast Factor - Effective Inventory
Note: Quantity to Cross Dock will also be adjusted if there is a Planned Sales Demand within the store stock cover period.
See Also: Planned Sales Demand.
Reorder Point
If the field Reorder Point is greater than zero and System Suggested Quantity is less than the Reorder Point, the System Suggested Quantity is set to Reorder Point and Decision is set to Brought up to Reorder Point.
Maximum Inventory
If the field Maximum Inventory is greater than zero and the sum of System Suggested Quantity and Effective Inventory does not equal Maximum Inventory, the System Suggested Quantity equals Effective Inventory subtracted from the Maximum Inventory. The field Decision is set to Brought to Maximum Inventory.
Condition:
- System Suggested Quantity + Effective Inventory <> (not equal to) Maximum Inventory
Result:
- System Suggested Quantity = Maximum Inventory – Effective Inventory.
Cross Dock
If the Journal is to replenish the warehouse with cross docking to the stores and the Quantity to Cross Dock is higher than System Suggested Quantity, the Quantity to Cross Dock is set to System Suggested Quantity.
Conditions:
- Purchase Order for warehouse with cross docking
- Quantity to Cross Dock > System Suggested Quantity
Result:
- Quantity to Cross Dock = System Suggested Quantity