Order point adjusters

Order point adjusters are values that are calculated based on a defined set of parameters. These values are then compared to the standard order point calculated on the Product Administration Month End Processing Report. If the order point adjusters are higher, the adjusted value is used in place of the report's calculated order point.

The goal of the order point adjusters is to provide a tool for calculating accurate order quantities for those products that experience infrequent demand or where order quantities vary considerably from one order to another. You can use order point adjusters to prevent stock-out situations for those products with unusual usage patterns.

If an adjustment to order point results in inventory value changes, you can be notified in Product Exception Center Administration after the Product Administration Month End Processing Report is run. This depends on the Order Control Changed Exception field in Product Replenishment Setup-Exceptions. You can also review inventory value changes using Value Change Inquiry in Product Exception Center Administration. This inquiry lists the total difference between the raw order point and the adjusted order point. The amount represents the amount by which inventory increases the next time the Purchase Entry Recommended Replenishment Action Report is run.

These order point adjusters can be set up:

  • Average Sales Quantity (ASQ)
  • Five-high
  • Threshold Minimum

ASQ

ASQ is calculated by dividing a product’s usage by its line hits. If the ASQ calculation is greater than the order point that was calculated by the Product Administration Month End Processing Report, the order point is adjusted to the ASQ value. The ASQ calculation is performed only if these conditions are met:

  • Average Sales Qty is selected in Product Warehouse Product Setup-Ordering
  • The minimum number of line hits set up in Product Replenishment Setup- Adjusters is met

Five-high

The Five-high calculation reviews the highest sales for the number of usage months that are defined in Product Warehouse Product Setup-Ordering or Product Replenishment Setup-Ranking-Detail Ranks. If the minimum number of hits (2 – 9999) that are defined in Product Replenishment Setup-Adjusters are met, the five highest sales quantities and related order information are stored and used to calculate an average. The highest sales quantity is disregarded, and then the remaining sales are added together and divided to determine an average sales value. If this average is greater than the Product Administration Month End Processing Report's calculated order point, the order point is adjusted to equal this value. The adjustment must not exceed the maximum difference set up in Product Replenishment Setup for the Five-high adjustment.

This adjustment to the standard order point compensates for products where sales hits are low, but where customers tend to buy larger package quantities, such as a case or master pack.

Threshold Minimum

The threshold minimum is specified in Product Warehouse Product Setup-Ordering. When the Product Administration Month End Processing Report is run, this minimum is compared to the report's calculated order point, or the raw order point. The order point that is stored in Product Warehouse Product Setup-Ordering is updated with the threshold minimum order point if these conditions are met:

  • The raw order point is less than the threshold minimum order point.
  • The threshold expiration date is not met.
  • The threshold order point is higher than the ASQ or Five-high order point.

Normally, any difference between the order point and line point are maintained when the order point is adjusted, but if the threshold minimum is 1, the raw order point is zero, and the raw line point is 1, the Order Point/Minimum field in Product Warehouse Product Setup is set to 1.

Additional parameters for the threshold minimum can be set up in Product Replenishment Setup-Exceptions. When these parameters are defined, an exception is created by the Product Administration Month End Processing Report for products that qualify. Exceptions can be viewed in Product Exception Center Administration.

Related topics
  • Inventory value change
  • Replenishment exceptions
  • Reviewing replenishment exceptions due to order point adjustments
  • Reviewing replenishment exceptions
  • Setting up order point adjuster parameters
  • Setting up optional replenishment parameters
  • Purchasing parameters