The Projected Purchase Order screen analyzes product demand, current stock, lead time and inventory turns to determine reorder quantities for a group of products. There are several settings that affect what the system will tell you to order and in what quantities. Recommended order quantities can be overridden at any time.
Once you have reviewed the factors below, continue to the Create a Projected PO page for step by step instructions on running a projection and creating a Purchase Order.
Product Master
There are several fields in the Product Master that affect the projection quantity for the product:
•Special Status (Information tab) - Nonstock products will only appear on the Projected P/O if they are currently requested to fill Sales Orders. Active products will appear based on the warehouse that you have selected. The Warehouse Procurement tab in the Product Master allows you to specify the Special Status of a product by warehouse.
•Lead Time Days (Information tab) - A system calculated moving average based on the difference between the P/O and receiving dates for the product. This number can also be manually entered.
•Box Quantity (General tab) - Items with box quantity amounts entered can only be ordered in multiples of that quantity. For example, if the box quantity of the product is 12 and demand dictates that you need to order 15, the projection will order 24.
•Min P/O Order Quantity (General tab) - The projection will always round up to meet the minimum quantity.
•Safety Stock % (General tab) - Used to calculate the Reorder Point for products, the Safety Stock % field defaults to 20% if it is blank.
•Seasonal (General tab) - Instead of factoring the full 12 months of demand into the projection, seasonal items only look at the future 3 months of demand for the product.
•Min Stock Quantity (General tab) - This field can be used for items without history or items with sporadic demand. This quantity will be used as the Reorder Point if it is greater than the system-calculated Reorder Point. If this amount is less than the system calculated Reorder Point, it will not be used. Minimum Stock Quantity can also be stored by warehouse, under the Warehouse Procurement tab.
Reorder Point
The fields listed above can affect the system-calculated Reorder Point, which can be viewed in the Product Analysis screen. The Reorder Point is based on your Safety Stock % and the average weekly Demand for the last 12 months. Please note that if this calculated Reorder Point is greater then Min Stock Quantity, the Min Stock Quantity will override your Reorder Point.
Example:
Weekly Demand x Lead time in Weeks + Safety Stock
10 per week x 2 weeks to get here + 20% safety stock = 24 for a Reorder Point
Projected Purchase Order
Additionally, there are options and settings within the Projected Purchase Order screen that will affect projection quantities:
•Lead Time and Inventory Turn Cycles - These figures apply to the vendor that you are ordering from and will affect order quantities of all products included. Increasing the Lead Time, the number of days that it takes you to receive products, will increase the quantities for the products. Increasing the Inventory Turn Cycles, the number of times per year that you order from the vendor, will decrease the quantities for the products. Small adjustments in these numbers may not show a large affect.
•The Options tab - The Options tab on the Projected Purchase Order screen allows you to specify additional settings for the projection, such as projecting to meet vendor minimum requirements, or including uncommitted Sales Order quantities. These options are explained in more detail on the Create a Projected PO page.
Consolidated Purchasing
The Consolidated Purchasing option allows you to order for all of your warehouses on a single Purchase Order, receive the items into a single warehouse, and then automatically print Stock Transfers to the additional warehouses when the material is received. This option must be enabled in the Company Master in order to be used. For more information on Consolidated Purchasing, including setup, options and general workflow, see the Consolidated Purchasing page.
