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
Planned Sales Demand
If there are Planned Sales Demand records for the cover period the system sums the quantity of the Planned Sales Demand records
Average Daily Sale = Average Daily Sale * (No of Days – No of Planned Sales Demand Days) + Total Planned Sales Demand Quantity
Planned Sales Demand = Total Planned Sales Demand Quantity
Sales Date From = the earliest date of the sales history period
Sales Date To = the last date of the sales history period
See Also: Replenishment Sales Profile, Replenishment Sales History Adjustment, Out of Stock Days, Planned Sales Demand
Stock Cover Days
The system uses the Store Stock Cover Reqd. (Days) field unless the Replenishment Journal is to replenish a warehouse, in which case it uses the Warehouse Stock Cover Reqd.(Days) field. If the Warehouse Stock Cover Reqd.(Days) field is empty, the Store Stock Cover Reqd.(Days) field is used.
Stock Cover Days = Store Stock Cover Reqd.(Days) -or- Stock Cover Days = Warehouse Stock Cover Reqd.(Days)
Coverage Shortfall
The system calculates the shortfall of stock to ensure that there is enough stock for the number of sales days that need to be covered.
Calc. Coverage Shortfall = ROUND(((“Average Daily Sale” * “Stock Cover Days”) – "Effective Inventory") / “Average Daily Sale”,1,'>')
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 Calc. Coverage Shortfall according to the Warehouse Stock Cover Reqd.(Days) field as the Journal replenishes the warehouse.
This additional process calculates the Calc. Coverage Shortfall for the store using the field Store Stock Cover Reqd.(Days).
Quantity to Cross Dock = ROUND(Average Daily Sales * Calc. Coverage Shortfall,1,'>')
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 – Calc. Coverage Shortfall = 3
- Warehouse – Calc. Coverage Shortfall = 8
- Forward Sale Forecast Factor = 1,1
Result:
- Quantity to Cross Dock = 10 * 3 = 30
- System Suggested Quantity = 10 * 8 * 1,1 = 88
- The Quantity in the Purchase Order for the warehouse is 88 but when the Purchase Order is received into the warehouse, the staff cross-dock (pick) the 30 to be delivered by a Transfer Order to the store.
Suggested Quantity
The system can suggest the quantity that the warehouse or the store needs according to the following formula:
System Suggested Quantity = ROUND(Average Daily Sale * Calc. Coverage Shortfall * Forward Sales Forecast Factor,1,'>')
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.
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