Product Warehouse Product Setup - Ordering field descriptions

Fields are presented in alphabetical order within each section.

Ordering

Critical Point

A calculated value reflecting order point minus safety allowance and is display only. This calculation is made during Product Administration Month End Processing and is used during Purchase Entry Recommended Replenishment Action Report to alert the buyer to products whose purchasing net available has reached or fallen below their critical point. Critical products can be sorted on the PO RRAR so that they are displayed first.

Incl Unavail Reason Quantity

Indicate if the PO RRAR or WT RRAR should include unavailable quantities marked for inspection in this product’s recommended order quantity. Your options include P, O, W, T, Both or Neither. Specify P in this field to include the unavailable quantity when determining the recommended order quantity only when you run the PO RRAR or Program Purchase Report when there is an unavailable quantity due to the ‘Inspection’ Unavailable Reason. A flag is displayed on the Purchase Demand Center Entry Extended Information window that informs the buyer that the recommended order quantity for this product includes existing unavailable quantities.

Specify T to include the unavailable quantity in calculating the transfer quantity on the WT RRAR.

Specify B to include it when calculating order quantity for both the PO RRAR and WT RRAR.

Specify N to include it for neither the PO RRAR or WT RRAR. Unavailable inventory with an Inspection reason is not considered when calculating order or transfer quantities.

Note: If this option is P, the warning

The Avail Qty was Adjusted by Inspection Unavailable
                        Qty

is displayed in Purchase Demand Center Entry when you run it for regular replenishment. This message does not show when you run it for Specials/Rush items.

Line Point/Max

The upper limit required for this product to be reordered and is expressed in stocking units. The available quantity (see Order Point/Min) must be below the line point to be included on the PO/WT RRAR. This amount can be initially specified by you or will be automatically calculated by the Product Administration Month End Processing Report when 6 months of history is accumulated.

Set up a line point/max until you have six months of usage history for Product Administration Month End Processing Report to properly calculate the line point/max. The line point is the order point plus usage during the review cycle. The line point calculation for a vendor ARP is rounded to 1 if the result is less than 1 and the order method is not min/max.

The review cycle is the frequency with which a product line is purchased when the supplier offers a total order discount. The review cycle is calculated and becomes the planned frequency of purchasing all products in the product line. The total annual purchases for the product is divided by the target buying objective to obtain the total order discount:

365 divided by (Total Annual Purchases) = Review Cycle

Total Order Purchasing Target

For example:

365 divided by ($350,000 purchased in the last 12 months) = 7.3 days

$7,000 Truckload Order gets freight paid

Set up a default in Product Line Setup - Order. When you specify the Vendor and Product Line values in Product Warehouse Product Setup-New, the data on the Product Line Setup record that matches the vendor and product line is used to populate the corresponding fields on the new Product Warehouse Product Setup record. This ensures the initial data for any new Product Warehouse Product Setup record associated with that product line is created with the same default data. This speeds up the creation of the record because you have less data to specify on a new record.

Method

The Purchase Entry Recommended Replenishment Action Report and Transfer Entry Recommended Replenishment Action Report use the ordering method to determine the quantity to buy of this product when it is time to reorder. The order methods are:

EOQ

Class

Min/Max

Quantity Break

Blanket Order

Human

If a product's ARP is a warehouse, the Product Warehouse Product Setup order Method is not Min/Max, the Season Begin field is 0, and no PD Pricing Setup Vendor pricing record exists, you receive this message is displayed when you save the record: Min/Max Recommended.

If an active Vendor pricing record exists and the order Method specified is not Quantity Break, and the Season Begin is 0, this message is displayed when you save the record: A Product Discount Exists, Check Your Order Method (8606).

EOQ

The economic order quantity balances the cost of carrying inventory with the cost of going through a replenishment cycle, thereby finding the quantity to purchase that will develop the lowest outgoing cost for the item. EOQ should be used if these conditions are present:

The price paid to the supplier does not vary when you buy more of this one item. There are no price breaks.
The usage rate of the item is higher than 1/2 unit per month.
The supplier's lowest permissible purchasing quantity is reasonable for you to attain. The square root of:
24 * Cost of Ordering (R) * Usage Rate
Cost of Carrying Inventory (K) * Unit Cost

R cost is the replenishment cost specified in Product Line Setup or Product Warehouse Description Setup. It is the cost of going through the replenishment cycle and is calculated to a cost per base unit.

K cost is the cost of carrying inventory. It is calculated as the amount the average base unit accumulated during the time you carry it on the shelf. In other words, how much did it cost you to carry this product in your inventory until you sold it? The carrying cost is also specified on the Product Line Setup or Product Warehouse Description Setup record.


Usage Rate	=	20 per month
Unit Cost	=	$7.00
R Cost	=	$5.00
K Cost	=	.30
EOQ	=	Square root of: 24 * 5.00 * 20/ .30 * 7.00
EOQ	=	Square root of: 120 * 20/ 2.1
EOQ	=	Square root of: 2400/ 2.1
EOQ	=	Square root of: 1142.86
EOQ	=	34 (rounded off)

For this item, the most profitable quantity to buy (as long as the cost and usage rate remain constant) is 34 units.

Class

The product classification method is an alternative to EOQ. All inventory products are included in the classification, except those with less than 6 months of activity history, inactive products, and labor products. Order as needed (OAN) products may be excluded during Product Administration Inventory Classification and Rank if you decide to exclude them.

There are 13 classes each product may fit into. The product's class determines the quantity to order. Product class must exist if the order Method is Class.

This table provides the standard breakdown of the classes. You can use SA Administrator Options-Products-Replenishment to manually set the percentages if you have unusual inventory items that do not coincide with the standard percentages.


Top	7.5%	of the products	Class 1
Next	7.5%		Class 2
Next	10%		Class 3
Next		10%	Class 4
	8%		Class 5
	8%		10% Class 6
	8%		Class 7
	8%		Class 8
	8%		Class 9
	8%		Class 10
	8%		Class 11
Last	9%		Class 12
	100%

The product class is determined by the Product Administration Inventory Classification and Rank Report. Classes 1, 2, 3, and 4 may account for 35 percent of your inventory, but 90 percent of the annual movement of money through inventory. The order quantity is determined by multiplying the usage rate times the product class number, then rounding to the nearest standard pack. Class 13 products are the products that fall below the Dead Stock Level you specify in SA Administrator Options-Products-Replenishment.

After your products have been classified, replenish according to this formula:

Class * Monthly Usage Rate


Class	Months Supply to Purchase	Turns per Year to Expect
1	1	12
2	2	6
3	3	4
4	4	3
and so on	and so on	and so on

The classification method approximates the results you would get with EOQ. Classification is easier to understand but EOQ gives a precise turnover result on each product. EOQ develops about one more turn per year than the classification method.

If you are using the classification method and there are changes in the lead time or review cycle, the order quantity will not be adjusted. The order quantity is calculated by usage rate times product class. If the usage rate changes, the order quantity is adjusted. Usage rates may be changed due to stock-outs, which cause a lower order quantity and thus a higher stock-out rate.

Min/Max

The min/max or order-up-to method is used in place of Class or EOQ when the branch may order one product at a time and has a very short lead time, usually less than one week. This method is used most often when products in a branch are resupplied from central warehouses. When the net available reaches the minimum quantity set, an amount is ordered to bring the net available up to the maximum quantity set. This method works well because the lead times are very short.

Formulas for classifications and EOQs work well in a range of usages and lead times that could be considered normal. Extremes in usage or lead time cause the formulas to be incorrect. Branch items with very short resupply lead times from a central warehouse are good examples of the low-end extreme.

While your branches may skew your formulas set for normal usages and lead times, they should also be providing you with a higher turnover rate than your central warehouse. By utilizing the push system, items are pushed out from the main warehouse to those branches it supports. They receive replenishment stock automatically when the system determines it is needed.

The first step involves classification of stock items. If management decides that a branch's inventory investment should turn 12 times a year, the individual classes must turn as follows:


Class 1	20 (times per year)	Class 7	6 (times per year)
Class 2	18	Class 8	5
Class 3	16	Class 9	4
Class 4	12	Class 10	3
Class 5	10	Class 11	2
Class 6	8	Class 12	1
		Class 13	0

If a product is class 1 in the branch, its replenishment quantity (when resupplied from the central warehouse) is 1/20th of a year's supply. A class 2 product's quantity is 1/18th, and so on. For the class 1 product the difference between min and max is 1/20th of a year's supply, for example:


Monthly Usage	=	100
Annual Usage	=	1200
Class	=	1
Replenishment Quantity	=	60
Difference between min and max	=	60

When the net available quantity for this product reaches the minimum, the central warehouse ships 60 units to the branch. The inventory-amount turnover objective is forced on the branch. They receive smaller quantities on high-class products to force the amount involved to turn faster.

Quantity Break

Quantity Break should be selected if any of the Price Discounting records for this product are based on quantity breaks in PD Pricing Setup-Vendor. If any other order method is used, quantity breaks are calculated in addition to the regular discount. This can become quite complicated; therefore, keep them separate. If a Price Discounting record exists with quantity breaks and the order Method is not Quantity Break, a warning message is displayed each time you update this record. The quantity break method also requires a carrying cost (K) to exist.

Example:


A Quantity	B Price	C Total Investment	D HoldingCost	E Investment Holding Cost	E / A Net cost per Unit
1	$10.00	$10.00	-	$10.00	$10.00
10	9.00	90.00	1.31	91.31	9.13
25	8.50	212.50	7.75	220.25	8.81
50	7.50	375.00	27.35	402.35	8.05
100	6.50	650.00	94.79	744.79	7.45
200	6.25	1250.00	364.58	1614.58	8.07
Usage Rate = 10/Month		K = 35% per Year

As you can see in the table, the quantity break at 100 produces the lowest net unit cost of all the options.

Blanket Order

The blanket order method specifies this product is generally ordered from a vendor on a blanket order. In this situation, the ordering controls are established by you. As you enter each blanket order, you control the order quantities and the timing of the deliveries.

If the quantity available in your warehouse is below the established levels, the PO/WT RRAR include the blanket order product. The report notifies you the product is already on a blanket order and a blanket release needs to be made to increase your product availability.

Human Method

The human method should be used for seasonal products but can be used for other types of products as well. The Product Administration Month End Processing Report ignores all products with a human order method. Set the product's order controls so the PO/WT RRAR includes the product when availability is below established levels.

Set up a default in Product Line Setup-Order. When you specify the Vendor and Product Line values in Product Warehouse Product Setup, the data on the Product Line Setup record that matches the vendor and product line is used to populate the corresponding fields on the new Product Warehouse Product Setup record. This ensures the initial data for any new Product Warehouse Product Setup record associated with that product line is created with the same default data. This speeds up the creation of the record because you have less data to specify on a new record.

Order Point/Min

The lowest quantity you should have available for sales and transfers. This quantity is calculated as follows:

Warehouse Products Setup Committed - Back Order + On Order + Received Quantities

This amount can be initially set by you or it will be automatically calculated by Product Administration Month End Processing each time it is performed. Set up an order point/min initially because Product Administration Month End Processing does not calculate an order point until 6 months of history exists.

In Product Warehouse Product Setup, this formula is used to calculate order point:

Usage * Lead Time + Safety Allowance

28 days

The order point consists of enough material (usage rate) to take care of customers during the time required to obtain the product (lead time), plus a measured amount of pad (safety allowance). Additional quantities for this product can be ordered at any time between the line point and order point, but when the order point or minimum is reached, replenishment must be initiated if the safety allowance is to protect you. Although the safety allowance is only needed half the time, it becomes a fixed number in the order point calculation.

When the order point is calculated, the result may not be a whole number. The value that is displayed in the Order Point/Min field is rounded up or down to the nearest whole number, but the value used during Product Administration Month End Processing Report to calculate the line point contains a decimal value out to 2 positions. For example, if the order point is calculated as .35, the line point calculation uses the actual order point value, but the value that is displayed in the Order Point/Min field is rounded down to zero.

A Min/Max order method may be used if a warehouse enjoys a short lead time of less than one week. This order method is also recommended when using a central warehouse to replenish remote sites in push mode. If the Min/Max order method is used, the order point is considered to be the minimum amount below which an order must be placed.

Order Point Adjustment Reason

The type of adjustment made to the warehouse product’s order point. It can be updated during Product Administration Month End Processing, Product Warehouse Product Setup-Ordering (reflects manual as the reason), and Product Warehouse Product Setup-Frozen. The adjusted order point, order point adjuster reason, and raw order point can be viewed in Product Inquiry-Replenishment by clicking on the Adjuster button, and also on the Purchase Buyers Threshold Report.

Valid order point adjustment reasons are:

Blank
Used if the project is not frozen, indicating it was updated with a normal order point calculation. No adjusters are used when calculating order point in Product Administration Month End Processing Report.
Frozen
Used if the product is frozen in Product Administration Month End Processing Report. This field is also updated if the product is frozen manually in Product Warehouse Product Setup-Frozen.
Manual
Used when the product’s order point is updated manually in Product Warehouse Product Setup-Ordering.
ASQ
Displayed if the order point was adjusted using the Average Sales Quantity (ASQ) calculation in Product Administration Month End Processing Report.
5-Hi
Displayed if the order point was adjusted using the Five-high calculation in Product Administration Month End Processing Report.
Threshold
Displayed if the order point was adjusted to meet the threshold minimum order point during Product Administration Month End Processing Report.
Low
Displayed if a low usage was corrected using the parameters set up in Product Replenishment Setup Usage - Cost Matrix.

Order Quantity

The quantity to be ordered the next time stock must be purchased from the supplier. The quantity should be enough to hold you over until the next replenishment cycle. This quantity should initially be entered by you until 6 months of history exists. At that point, Product Administration Month End Processing Report automatically determines the quantity for all order methods except blanket order or human.

For the order quantity you specify in this field to be honored, you must set up a default ordering quantity on the Order view of Product Line Setup.

When you specify the Vendor and Product Line values in Product Warehouse Product Setup, the data in the Product Line Setup record that matches the vendor and product line is used to populate the corresponding fields on the new Product Warehouse Product Setup record. This ensures the initial data for any new Product Warehouse Product Setup record associated with that product line is created with the same default data. This speeds up the creation of the record because you have less data to specify on a new record.

You must also select the Use ROQ? option in the Transfer section of the General view in Product Line Setup. If you do not select Use ROQ?, the WT RRAR uses the line point minus purchasing net available formula to calculate the quantity to be transferred.

Override Reason

If the order quantity is overridden, an override reason can be entered to explain why the quantity was changed.


Override Reason	Description
Human	The order quantity was set manually and will not be overridden by Product Administration Month End Processing.
Max Weeks Su	The order quantity calculated by Product Administration Month End Processing was overridden by the value in the Max Weeks Supply field from the Product Line Setup or Product Warehouse Description Setup record.
Min Weeks Su	The order quantity calculated by Product Administration Month End Processing was overridden by the value in the Min Weeks Supply field from the Product Line Setup or Product Warehouse Description Setup record.

When you specify the override code, the override description is displayed to the right of the field. Override reasons are set up in SA Table Code Value Setup.

Raw Line Point

The line point calculated for this product during Product Administration Month End Processing Report and is informational only. No adjusters have been applied to this value. If no adjusters have been used at all, this will equal the value in the Line Point/Max field.

Raw Order Point

The order point calculated for this product during Product Administration Month End Processing Report and is display only. No adjusters have been applied to this value. If no adjusters have been used at all, this is equal to the value in the Order Point/Min field.

Surplus Calculation

The flexibility to calculate with actual monthly usage is available by using the Surplus Calculation setting in Product Warehouse Product Setup-Ordering and Product Line Setup-Order. Use the Surplus Calculation field to choose between:

Usage (Product Warehouse Product Setup Usage Rate)
Actual Monthly Usage (AMU)

These options control the calculation method used when you view long-term surplus in Product Availability Inquiry or run the Product Surplus Stock Report to analyze long-term surplus inventory. They allow you to define a long term surplus calculation method, even at the product level.

Retain the default, Usage, to use this formula to calculate long-term usage:

Usg = Total Usage / Total # of Months

where:

Total Usage is the amount of the product sold in the time period specified in the Months field.
Total # of Months is the time period specified in the Months field.

If you select Actual Monthly Usage, the Product Surplus Stock Report calculates a rolling actual monthly usage:

AMU = Past 12 Months (periods 2-13) / 12 * Number of Months for Long Term

where:

Past 12 Months (periods 2-13) is the amount of the product sold in the last 12 months (typically periods 2-13, as calculated the last time you ran Product Administration Month End Processing Report and as displayed in the Usage Information window).
12 represents a 12-month time period.
Number of Months for Long Term is one of two values: the default Long Term Surplus months specified at the company, warehouse, vendor, or product line level in Product Replenishment Setup-Ranking, or the time period set in the Product Surplus Stock Report option, Number of Months for Long Term Calc. The Product Replenishment Setup months are used when calculating long-term surplus in Product Availability Inquiry, Purchased Demand Center Entry, and Transfer Demand Center Entry.

Both methods impact only the long-term surplus calculation. The short-term surplus calculation is unchanged. You should review your product lines and products to determine the surplus calculation method. For instance, you could use the Product Line Setup-Order Surplus Calculation setting, Actual Monthly Usage, as a default. All product records created in Product Warehouse Product Setup-Ordering under that product line going forward also are set for Actual Monthly Usage. You can still, however, manually change the setting on a product level. How ever Surplus Calculation option is set in Product Warehouse Product Setup-Ordering, that same value is displayed in the other functions.

Usage Method Options

In conjunction with the Surplus Calculation option, you can also select from these Usage Method Options when you run the Product Surplus Stock Report:

S)urp - uses each product’s Product Warehouse Product Setup-Ordering Surplus Calculation selection.
U)sg - overrides whatever Product Warehouse Product Setup-Ordering Method is selected for all products and applies the Product Warehouse Product Setup-Ordering Usage Rate.
A)MU - overrides with the AMU rate.
H)igh - uses the highest of the two methods.
L)ow - uses the lowest of the two methods.
B)oth H/L - uses both Usage and AMU, printing the results of both on the report.

Other functions

To enable updating the Surplus Calculation setting for multiple products, the Surplus Calculation field is displayed in these functions:

Product Administration Month End Processing Report-Mass Update
Product Administration Exception Processing Center-Manual Product List

You can maintain the Surplus Calculation setting in these functions:

Product Administration Exception Processing Center-Detail-Ordering
Purchase Demand Center Entry-Ordering.

Ordering Units

Buying

The buying unit that applies to this product if the buying unit differs from the Product Setup Stocking Unit. This should be the unit you use when you purchase this product from the vendor.

For example, you may order this product by the roll but stock, or sell, by the foot. Specify roll in the Buying Unit field and foot in the Product Setup Stocking Unit field. The buying unit will default during Purchase Order Entry and PO RRAR. Refer to the field description for Standard Pack that illustrates the manner in which buying unit, standard pack, and stocking unit are used.

When a valid buying unit is specified, the buying unit conversion is displayed to the right of the field and the description is displayed under the field.

When you perform a lookup on the Buying field, valid unit conversions for this product are displayed. You can display specific conversions or nonspecific conversions. If there are no unit conversions for the product entered, nonspecific unit conversions are displayed. The unit conversions are set up in SA Table Code Value Setup or Product Extended Unit Conversion Setup.

Standard Pack

The quantity of the product packed and sold by the supplier. Examples of a standard pack are box, carton, bundle, roll, reel, or pallet. When you purchase quantities for inventory, they should always be rounded to the nearest standard package.

The PO RRAR always rounds to the nearest standard pack; however, the WT RRAR does not use standard pack rounding.

The standard pack may not be the same as the buying unit. If the standard pack differs from the buying unit, enter the standard pack. If the stocking unit is entered as the standard pack, a conversion factor of 1 is used. Your entry is validated in SA Table Code Value Setup or Product Extended Unit Conversion Setup.

These examples illustrate how the buying unit, standard pack, and stocking unit are used in the system.

When the Product Setup stocking unit is the only unit specified, unit rounding will be to the nearest stocking unit. For example, if your stocking unit is each and the order quantity is 145, rounding will not occur and the order quantity will be 145 each.

If the Product Setup Stocking Unit field is each and the Product Warehouse Product Setup Buying Unit is dozen (the standard pack is not specified), the order quantity is rounded to 12 dozen, which is the order quantity rounded to the nearest buying unit.

If the Product Setup Stocking Unit field is each and the Product Warehouse Product Setup Standard Pack is dozen (the buying unit is not specified), the order quantity is 144 each, which is the order quantity rounded to the nearest standard pack and expressed in stocking units.

If the Product Setup Stocking Unit field is each, the Product Warehouse Product Setup Standard Pack field is case (which contains 144 stocking units), and the Buying Unit field is dozen, the order quantity is 12 dozen, which is the order quantity expressed in the buying unit, rounded to the nearest standard pack.

The standard pack is also used when you process the Purchase Entry Program Purchase Report. The Use Standard Pack Rounding option in Purchase Entry Program Purchase Report allows the system to automatically round the buy amount to the nearest multiple of the standard pack.

For example, consider that the Buying unit in Product Warehouse Product Setup is each, the standard pack is dozen, and the Purchase Entry Program Purchase Report calculated an amount to order of 13. Standard pack rounding would round the 13 to 12 [1 dozen]. If the report calculated an amount to order of 18, standard pack rounding would round to 24 [2 dozen]. The exception to this occurs when the amount to buy is less than half of a standard pack. In this case, no rounding is performed. For example, continuing the example above, if the buy amount is 5, then no rounding is performed and 5 is displayed on the report.

Transfer

Warehouses may use different units of measure when they transfer merchandise. The Product Setup record provides units of measure for stocking, selling, and counting products. The stocking unit of measure, which defaults to warehouse transfers by the requesting warehouse, may not be the same unit of measure the shipping warehouse uses to pick and ship the transfer. The buying unit of measure is typically set up to match the vendors’ selling unit of measure, which may not be used when merchandise is transferred. This field provides an additional unit of measure, specifically for transferring merchandise between warehouses. This transfer unit is tracked at the warehouse level to allow a default transfer unit based on the shipping warehouse.

If you specify a unit of measure in the Transfer field, that unit becomes the default unit of measure for Transfer Entry Recommended Replenishment Action Report, Transfer Entry, and Transfer Entry Recommended Replenishment Action Report-Accept when you add line items to a warehouse transfer. The standard unit of measure validation with the Product Extended Unit Conversion Setup and SA Table Code Value Setup records occurs.

The exception for this validation would be if one of these conditions are met:

In Product Replenishment Setup-Rounding, the Transfer Unit Rounding field is set to Transfer Unit and in Product Warehouse Description Setup-Ordering, the Round Only option is selected for Ordering Units. Then, the unit remains in the stocking unit, but the quantity is a multiple of the transfer unit.
In Product Replenishment Setup-Rounding, the Buying Unit Rounding field and the Transfer Unit Rounding field are both set to Smart Unit. If the buying unit is larger than the transfer unit, then the buying unit becomes the default unit of measure for the warehouse transfer line.

Usage

Exclude Usage Move

To enable usage and replenishment for a tiered and preferred product, clear the Exclude Usage Move option. If this option is selected, the system does not perform usage and replenishment for this product. This option must be set in conjunction with assigning a numeric priority to a Product Preference in SA Table Code Value Setup, and selecting the Allow Usage Move option in Product Warehouse Description Setup.

Frozen

Product Administration Inventory Classification and Rank classifies all products into classes 1-13. It accurately classifies all products according to their usage, and the product class may change each time Product Administration Inventory Classification and Rank is performed. Select this option to prevent this product from being reclassified each time the Product Administration Inventory Classification and Rank is performed.

Method

Indicate how usage should be rolled for ordering points for seasonal or nonseasonal products, providing flexibility during the Product Administration Month End Processing Report calculation of the product's usage.

Options are:

Forward

Backward

Trend %

Exponential Smoothing

Blank

The Product Administration Month End Processing Report Upper or Lower Trend Percentage Cap for Prods options also apply. Products that are truly seasonal with Product Line Setup or Product Warehouse Product Setup records set to seasonal will limit or cap the order quantity to 3 month's supply when Product Administration Month End Processing Report and PO RRAR calculate the order quantity. If the product is not seasonal, Product Administration Month End Processing Report rolls back the number of months set in the previous field to calculate the usage rate.

Note: The applied trend percentage is calculated by Product Administration Month End Processing Report to accommodate fluctuations in sales from one year to the next.

Example data used for each option is based on this sample Product Warehouse Product Setup information.


2015		2016
Jan	90	Jan	100
Dec	120	Dec	150
Nov	250	Nov	300
Oct	300	Oct	320
Sep	250	Sep	280
Aug	190	Aug	210
Jul	350	Jul	320
Jun	190	Jun	200
May	120	May	110
Apr	100	Apr	100
Mar	50	Mar	70
Feb	110	Feb	130
Totals	2120		2290

The Product Warehouse Product Setup Usage Months is 6, the current Product Administration Month End Processing Report was run on 31 January, 2015, and has an Upper Trend Percentage Cap of 150% (50% increase for the year).

Rate

Displays the usage rate, months, frozen, and methods defined in Product Warehouse Product Setup-Ordering.

Total Rate

The sum of the forecasted and non-forecasted rate.

Forward

If you choose Forward, Product Administration Month End Processing Report rolls back 12 months and goes forward the number of months specified to calculate usage in Product Warehouse Product Setup. The Product Line Setup Trend Percentage field or the trend percentage calculated by Product Administration Month End Processing Report is not applied. This option is valid for seasonal and regular products. Be aware, however, that products that use the forward usage control and are not seasonal, may still be frozen during Product Administration Month End Processing Report due to low usage.

Using the sample data above for non-seasonal products with a Forward usage control, the system rolls back 12 months, then forward six months, totals the usage, and averages.

Jul-Feb (320 + 200 +110 + 100 + 70 + 130) = 930

Usage = 930 / 6 = 155

For products with varying usage throughout the year, the Forward method works well to absorb increases or decreases in the moving average of usage amounts.

Backward

If you choose Backward, Product Administration Month End Processing Report rolls backward the number of months specified in the usage Months field. This applies to regular and seasonal products. The Product Line Setup Trend Percentage field or the trend percentage calculated by Product Administration Month End Processing Report is not applied (this is identical to the way Product Administration Month End Processing Report works if the Method field is blank and the product is not seasonal).

For seasonal and non-seasonal products with a Backward usage control method, the system rolls back six months, totals the usage, then averages.

Jan-Aug (100 + 150 + 300 + 320 + 280 + 210) = 1360

Usage = 1360 / 6 = 226.67

Trend Percentage

If you choose Trend %, Product Administration Month End Processing Report rolls back 12 months and goes forward the number of usage months specified in the Months field. Then it will analyze two years of history and apply the trend percentage. In addition, the Product Administration Month End Processing Report Upper or Lower Trend Percentage Cap for Prods options are considered. This selection allows you to utilize either the trend percentage calculated during Product Administration Month End Processing Report, or the value entered in Product Line Setup, and the Product Administration Month End Processing Report Upper or Lower Trend Percentage Cap for Prods options to forecast usage for seasonal and regular products.

If you specify a value in the Trend Pct field in Product Line Setup, it is used instead of the calculated trend percentage, unless it falls outside of the Upper or Lower Trend Percentage Caps for Prods in Product Administration Month End Processing Report. In that case, the upper or lower cap is used.

For seasonal and regular products, the system rolls back 12 months, forward six months, totals the usage, calculates the average, then applies the percentage factor.

Jul-Feb (320 + 200 + 110 + 100 + 70 + 130) = 930

Usage = 930 / 6 = 155

Trend Percentage = 2290 / 2120 (95 usage / 94 usage)

Trend Percentage = 1.08% increase

Upper Trend Percentage Cap = 150%

Lower Trend Percentage Cap = 60%

Usage = 155 * 1.08 = 167.4

The ability to apply the trend percentage method assists you with products for which sales are decreasing or increasing. Without a trend percentage, products that are losing sales may recommend that you purchase more than you really need. Conversely, products with sales that are showing an upward trend may recommend you purchase short of your needs.

Exponential Smoothing 1-9

You can select an alpha factor of 1 to 9 to use the exponential smoothing method of calculating usage. This places more emphasis on recent or past history as compared to the standard system method that uses a moving average. Exponential smoothing also uses a moving average, but applies an alpha factor to the average usage in order to place more weight on recent or past history. The system uses this formula when an alpha factor is specified in the Method field.

{Current Month's Usage * (Alpha Factor/10)} + [{1 - (Alpha Factor/10)} * Usage] = Usage

Current Usage = 210

Usage Rate = 105

Alpha Factor = 7

Usage = {210 * (7/10)} + [{1 - 7/10)} * 105] = 178.5

In this example, most of the weight (70%) was placed on the more recent calculated usage. If the Alpha Factor was 2, more weight is placed on the past sales history.

The current month's usage is the last full month of calculated sales usage determined by the Product Administration Month End Processing Report. The first month of usage history is not used in the calculation. Override usage is used in place of normal usage if it exists for any month.

Some products lend themselves better to exponential smoothing as a method of calculating usage. These generally are:

Products that are new and do not have much usage history
Products with usage that is in rapid escalation or decline
Products that have a demand created from one or a few customers who buy in cycles that extend beyond a single month

Exponential smoothing is not used if a value other than 1 through 9 is specified in this field.

Blank

If the Method field is blank, Product Administration Month End Processing Report calculates the usage rate based on the seasonality of the product and usage months. This is the default on new products. If the product is seasonal, Product Administration Month End Processing Report rolls back 12 months and goes forward the number of months specified in the Months field to calculate usage. In addition, it uses two years' worth of history when applying the trend percentage for yearly changes.

For seasonal products, the system rolls back 12 months, then forward six months, totals, averages, then applies the percent.

Jul-Feb (320 + 200 + 110 + 100 + 70 + 130) = 930

Usage = 930 / 6 = 155

Trend Percentage = 2290 / 2120 (95 usage / 94 usage)

Trend Percentage = 1.08% increase

Trend Percentage Cap = 150%

Usage = 155 * 1.08 = 167.4

For regular products and a blank Method field, the system rolls back six months, totals the usage, then averages.

Jan-Aug (100 + 150 + 300 + 320 + 280 + 210) = 1360

Usage = 1360 / 6 = 226.67

Months

If you have products that have unusual usage patterns, specify the number of months you expect will generate adequate usage history.

Indicate the number of months that should be used to recalculate the usage rate by Product Administration Month End Processing Report. The standard default is 6 months. The usage rate is not calculated on a product with less than 6 months of history, but the entire 6 months does not need to be used. You may also select to use more than 6 months of history to recalculate the usage rate; however, you are limited to a maximum of 12 months. If you have seasonal products, Product Administration Month End Processing Report checks your Season Begin and Season End dates and goes back twelve months, then forward the number of months you specify here. This method produces an equivalent season for you.

Rate

The rate of anticipated usage for this product in the upcoming month. Usage includes repetitive sales to customers, transfers to other warehouses, and material withdrawn from inventory for kit assembly and internal use.

The usage is expressed in stocking units per month. This number can be initially set manually or Product Administration Month End Processing Report automatically calculates it each time the function is performed. The usage rate is the basis for the PO/WT RRAR and must be developed for every stock item independently.

The usage rate is determined by the past 6 months of history, unless a different value is specified in the Months field.

Total Usage / Total # of Months = Usage Rate, or

216 / 6 = 36

The last 6 months may not yield perfect estimates but will generate consistently better results than any other time period you might select from the past. A usage rate is not calculated on a product with less than 6 months of history. The exception to this rule is seasonal products. Seasonal products use the equivalent 6 months from last season's history to calculate a usage rate.

If you have products that have unusual usage patterns, the Months field allows you to specify the number of months you think will generate adequate usage history.

You may also calculate usage using an exponential smoothing method. This is a method of forecasting usage placing emphasis on more recent history.

Usage

Click the Usage link to view the Usage Information window. If you are adding or modifying, you can update the usage. If you are in view mode, you can only use this link to view usage.

See Show Usage.

Seasonality

Order Quantity

The quantity to be ordered the next time stock must be purchased from the supplier during your out-of-season months. For seasonal products, the order quantity increases when the product is in season and decreases when it is out of season. The quantity should be enough to meet demand until the next replenishment cycle.

Override Reason

If the order quantity is overridden, an override reason can be entered to explain why the quantity was changed. The override reason can be manually entered or Product Administration Month End Processing Report automatically assigns one of these reasons:


Override Reason	Description
Human	The order quantity was set manually and will not be overridden by Product Administration Month End Processing.
Max Weeks Su	The order quantity calculated by Product Administration Month End Processing was overridden by the value in the Max Weeks Supply field from the Product Line Setup or Product Warehouse Description Setup record.
Min Weeks Su	The order quantity calculated by Product Administration Month End Processing was overridden by the value in the Min Weeks Supply field from the Product Line Setup or Product Warehouse Description Setup record.

Review Days

The number of days prior to the selling season that you must begin stocking the seasonal product.

The Product Seasonal Product Analysis Report uses this field to determine when it should print the product on the report for your review. You can increase or decrease this value to suit your needs. Factors may include how often you generate the Product Seasonal Product Analysis Report or the lead times for this product.

Season Begin

Seasonal products are those for which demand is much greater in one time of year than another. Generally, it is a product where 80 percent of the annual sales falls in six (or less) consecutive months. The Product Administration Month End Processing Report looks back at the equivalent sales history from the past to develop usage predictions and to set ordering controls for both seasonal and non-seasonal periods.

The Season Begin field should be the date the season is considered to begin. For example, lawn chairs may start their season in May, whereas Christmas lights begin in November. Enter the month the season begins. The system assumes the season begins on the first day of the month.

Product Administration Month End Processing Report determines if a product is seasonal by looking at the Season Begin and Season End dates. If the Product Line Setup record is not set up as seasonal, Product Administration Month End Processing Report looks at the Product Warehouse Product Setup record for the product to determine if it is seasonal. If there is a difference between Product Line Setup and Product Warehouse Product Setup in the beginning and ending seasonal months, Product Administration Month End Processing Report uses the Product Line Setup record.

Season End

The month the season ends. The season is assumed to end on the last day of the month.

Trending Demand

Date for non-application

The expiration date for the seasonal trending override. Leave this field blank to not apply an expiration date. You should, however, specify an expiration date, either here, or in Product Replenishment Setup-Usage. If the current date is greater than this expiration date, the seasonal trending override calculation is not performed.

Do not apply when last year's sold units <

The minimum number of units required before the seasonal trending calculation is performed. If the units sold last year are less than this number, the calculation does not take place, the standard seasonality logic is used, and an exception is created that can be viewed in Product Administration Exception Processing Center.

Do not apply when this year's sold units <

The minimum number of units required before the seasonal trending calculation is performed. If the units sold in the current year are less than this number, the calculation does not take place, the standard seasonality logic is used, and an exception is created that can be viewed in Product Administration Exception Processing Center.

Frozen

Select this option to freeze the seasonality settings in the Trending Demand section on this window. Use the options here rather than the same seasonality settings in Product Replenishment Setup-Usage. This ensures that the seasonality settings for this product override the seasonality settings in Product Replenishment Setup at any record level when seasonal trending demand is calculated during Product Administration Month End Processing Report.

To not use the seasonal trending demand calculation at all for this product, select this option, and specify zeroes in the other Trending Demand fields. To not use seasonal trending demand for any products in your company or warehouse, leave this field cleared and set the same seasonal options to zero in Product Replenishment Setup-Usage.

Lower Limit to trend %

The minimum trend percentage that is allowed when adjusting usage for seasonal trending. If the trend percentage is less than this minimum, then the trend percentage is adjusted up to the minimum seasonal percentage.

Upper Limit to trend %

The maximum trending percentage that is allowed when adjusting usage for seasonal trending. If the trend percentage is greater than this maximum, then the trend percentage is adjusted down to the maximum seasonal percentage. If this is set to 100%, no seasonal trend maximum or minimum is applied.

Safety Allowance

Amount

The padding incorporated into the order point calculation to protect for a variance in the expected usage or lead time the next time this product is ordered from the supplier. The safety allowance directly affects the order point and occasionally needs to be adjusted.

The safety allowance is considered a fixed asset that turns zero times. Therefore, do not add more safety than is necessary. For example, use a 50% safety allowance. However, your experience with product lead times and other factors that contribute to the safety allowance calculation may prove to be less than or greater than 50%.

There are three conditions that contribute to safety allowance variances:

Products with extremely erratic usage patterns.
Products with a totally unpredictable lead time.
Products for which you must provide 100 percent service.

This formula uses the percentage or quantity specified in the Safety Allowance field. Product Administration Month End Processing Report uses this formula to recalculate the new safety allowance amount.

Safety Allowance %

Safety Allowance / (Usage Rate * Average Lead Time)

Safety Allowance Quantity

{Usage Rate * (Lead Time / 28)} * Safety Allowance %

The system uses the average lead time to calculate the safety allowance, regardless of the prior or last lead times. If the prior lead time date is 6 months or older than the last lead time date, then the system uses the last lead time as the average lead time.

When you update the record, the actual safety allowance quantity ordered is calculated and is displayed below the safety allowance if you specify a percentage in the previous field. If you specify a safety allowance quantity, the safety allowance percentage is calculated and is displayed.

Frozen

Select Frozen to prevent the safety allowance from being updated during Product Administration Month End Processing Report based on the minimum/maximum lead time safety percentage parameters in Product Replenishment Setup-Ranking-Detail Ranking.

If this setting is selected, the value in the Safety Allowance Amount field (not the dimmed calculated amount below this) is frozen. It is not overridden by any values defined in Product Replenishment Setup, or calculated during Product Administration Month End Processing Report. The calculated safety allowance amount in the second field is still recalculated during Product Administration Month End Processing Report (based on the frozen quantity), whether that is specified and frozen as a quantity, percent, or days value. If you want to freeze a safety allowance quantity, specify the quantity in the first Safety Allowance Amount field, select the Qty option, then select the Frozen option.

Percent / Qty / Days

Indicate if the safety allowance should be calculated based on a percentage, quantity, or days.

This formula uses the percentage or quantity entered in the Safety Allowance field. Product Administration Month End Processing Report uses this formula to recalculate the new safety allowance amount.

Safety Allowance %

Safety Allowance / (Usage Rate * Average Lead Time)

Safety Allowance Quantity

{Usage Rate * (Lead Time / 28)} * Safety Allowance %

If you select Days, the days entered in the Amount field is converted to safety allowance quantity using this formula:

Safety Allowance Quantity = Safety Allowance Days * (Usage Rate/28)

Ranking

Company Rank

Frozen

Select this option to freeze the company and warehouse product rank. If this is selected, Product Administration Inventory Classification and Rank does not update the value in the Company Rank and Warehouse fields when the option Update Rank for Company or Update Rank for Warehouse is selected.

Warehouse

Applies to ABC ranking, which is set up in Product Replenishment Setup - Ranking. If yourPerform Detail Ranking Functionality is Hits, and you choose to rank by company in Product Administration Inventory Classification and Rank, the system calculates the ranking for the product by considering all sales hits for this warehouse product and stores that value in this field. If you change this field, you must specify a letter from A to Z, depending on the number of ranking levels defined in Product Replenishment Setup-Ranking. If you want to lock in a specific rank that you specify here so that it is not updated by Product Administration Inventory Classification and Rank, select the Rank Freeze option below. Refer to the description of the Product Replenishment Setup-Ranking for more information on ABC product ranking.

The Warehouse and Frozen options are not accessible if you have not activated ABC ranking in Product Replenishment Setup-Ranking.

Order Point Adjusters

Avg Sales Quantity

Select this option to have the Average Sales Quantity (ASQ) calculation performed during Product Administration Month End Processing Report for this product. ASQ is calculated by dividing a product’s usage by its line hits. If the ASQ calculation is greater than the order point calculated by Product Administration Month End Processing Report, the order point is adjusted to the ASQ value. The minimum number of line hits set up in Product Replenishment Setup-Adjusters must also be met.

Clear this option and ASQ is not performed for this product, regardless if parameters are set up in Product Replenishment Setup-Adjusters. To set the ASQ (and Five-high) setting for a group of products, use the Mass Update function in Product Administration Exception Processing Center.

Note: This option does not control whether exceptions are created for any inventory values changes that occur during Product Administration Month End Processing Report as a result of the ASQ adjuster being applied to ordering controls. It only controls the calculation and storing of the ASQ value. You can view any inventory value changes in Product Administration Exception Processing Center by choosing Inventory Value Change by Warehouse Inquiry. To have exceptions created as well, set the option in the Inventory Value section in Product Replenishment Setup-Exceptions to Yes.

Expires

A date by which the threshold minimum order point will expire. If the date has expired, the threshold minimum order point is not considered as an adjuster when Product Administration Month End Processing Report is run and order points are updated.

Five High

Select this option to perform the Five-high calculation during Product Administration Month End Processing Report for this product. The Five-high calculation reviews the highest sales for the number of usage months defined in Product Warehouse Product Setup-Ordering or Product Replenishment Setup - Ranking-Detail Ranking. If the minimum number of hits is met, the five highest sales quantities are used to calculate an average. Before averaging, the highest sales amount is removed. If this average is higher than the order point calculated during Product Administration Month End Processing Report, the order point is adjusted to the Five-high value.

Clear this option and Five-high is not performed for this product, regardless if parameters are set up in Product Replenishment Setup-Adjusters.

Note: This option does not control whether exceptions are created for any inventory values changes that occur during Product Administration Month End Processing Report as a result of the 5-Hi adjuster being applied to ordering controls. It only controls the calculation and storing of the 5-Hi value. You can view any inventory value changes in Product Administration Exception Processing Center by selecting Inventory Value Change by Warehouse Inquiry. To have exceptions created, set the option in the Inventory Value section in Product Replenishment Setup-Exceptions to Yes.

Max $ Difference - ASQ

The maximum amount that should be used when adjusting inventory values based on the ASQ order point calculation. If the inventory change is greater than this amount , the ASQ adjuster is not used, and an exception is created during Product Administration Month End Processing Report can be viewed in Product Administration Exception Processing Center. This amount can also be set up in Product Replenishment Setup-Adjusters.

Max $ Difference - Five High

The maximum amount that should be used when adjusting inventory values based on the Five-high order point adjustment calculation. If the inventory change is greater than this amount, the Five-high adjuster is not used, and an exception is created during Product Administration Month End Processing Report that can be viewed in Product Administration Exception Processing Center. This amount can also be set up in Product Replenishment Setup-Adjusters.

Threshold Minimum Order Point

The minimum order point you will allow for this product. If the order point calculated during Product Administration Month End Processing is less than this minimum, the order point is adjusted up to this minimum.

Specify 0 if you do not want to set a minimum threshold order point.

Threshold Reference

A reference or description to indicate why this product is set up with a threshold minimum order point. It is displayed in Product Administration Exception Processing Center on the exceptions that are generated due to the threshold minimum order point being applied.

Use Max $ - ASQ

Select this option to use the maximum amount specified in the Max $ Difference (ASQ) field. This ensures that any increase to inventory values as a result of the ASQ adjustment does not exceed this limit. The maximum difference can also be set up in Product Replenishment Setup-Adjusters. If the ASQ option is selected, and this option is not, the parameters in Product Replenishment Setup-Adjusters are used.

If the maximum difference is exceeded, an exception is created during Product Administration Month End Processing Report. If an exception is created, the ASQ adjuster is not used to override the Product Administration Month End Processing Report-calculated order point (raw order point) and line point (raw line point), nor is the order point or line point in Product Warehouse Product Setup-Ordering updated.

Use Max $ - Five High

Select this option to use the maximum amount specified in the Max $ Difference (Five High) field. This ensures that any increase to inventory values as a result of the Five-high adjustment does not exceed this limit. The maximum difference can also be set up in Product Replenishment Setup-Adjusters. If the 5-Hi option is selected and this option is not, the parameters in Product Replenishment Setup-Adjusters are used.

If the maximum difference is exceeded, an exception is created during Product Administration Month End Processing Report. If an exception is created, the Five-high adjuster is not used to override the Product Administration Month End Processing Report-calculated order point (raw order point) and line point (raw line point), nor is the order point or line point in Product Warehouse Product Setup updated.

Adjusters

See Product Inquiry - Replenishment overview.

Lead Time/Date

Average

The lead time is the total time required to replenish this product from the date the order is placed to the first receipt of the product from its ARP source. The fields include the number of days in the average lead time, and the last day the number of days was automatically updated, and the prior lead time before it was last updated. Weekend days are included in the average lead time. The average lead time is used to calculate the order point during Product Administration Month End Processing Report.

A fourth field, the Frozen Code, can be set to freeze the average lead time at the current value (999), not freeze (0), or to define a minimum number of lead time days (1-998).

If you decide to freeze the lead time (999), it is not updated during Purchase Entry Receipt of Inventory/Transfer Entry Receipt of Inventory or KP Work Order Center Entry. The last and prior lead time dates are updated.

If you leave the default as 0 (to not freeze), these fields are updated from Purchase Entry Receipt of Inventory and Transfer Entry Receipt of Inventory or KP Work Order Center Entry. If the entire quantity on a line item is back ordered and the quantity is received on the back order, lead time is recalculated. If a partial quantity is received, the lead time is calculated for the quantity that is received on the order (with a -00 suffix), but it is not calculated for the product on the back order.

If you specify a number of days (1-998), the lead time cannot drop below this number. If it does, the average lead time days (the first field) is adjusted to equal this number. If lead time is calculated to be longer than the number specified in this field, the lead time is updated with the new lead time. However, the value in the Average Lead Time field must greater than the Frozen Code at the time it is set in order to take effect during Product Administration Month End Processing. If the frozen code value is greater than the average lead time, it is never used.

Note: When a record is added, specify an estimated average lead time to avoid a 50% variance exception being reported the first time the product is received. In addition, the product is frozen by Product Administration Month End Processing Report if a zero average lead time is found.

Last

The Last Lead Time/Date field contains the most recent lead time of products received through Purchase Receipt of Inventory Entry/Transfer Receipt of Inventory Entry from its ARP source. The initial purchase of an item is the only time non-ARP lead time is updated.

Because the system treats a blanket release as a back order, a blanket release that is received does not update this field.

LT History

To recalculate lead time for purchase order receipts, see:

Lead Time History window .

Prior

The Prior Lead Time/Date is the lead time before the Last Lead Time/Date. Each time a new receipt of product is received, the value in the Last Lead Time/Date is moved to the Prior Lead Time/Date and the Average Lead Time/Date is recalculated.

Class

Class

A product class must be entered if the Order Method field is Class. The product classification method of ordering is another alternative to EOQ. These classes determine the quantity to order. There are 13 classes in which each product may fit.

This field is updated from the Product Administration Inventory Classification and Rank Report. All inventory products are included in the classification, except those with less than 6 months of activity history, or 12 if they are seasonal. To manually set a product's class, refer to the Frozen field.

Frozen

Select this option to freeze the product’s class at the value in the Class field. If this is selected, class is not updated during Product Administration Inventory Classification and Rank.

Frozen Code

Freeze the average lead time at the current value (999), not freeze (0), or to define a minimum number of lead time days (1-998).

Note: The value in the Frozen Code field must be less than the average lead time when it is set to take effect during Product Administration Month End Processing Report. If the frozen code value is greater than the average lead time, it is never used.

ABC Stratification

Final

If the ABC Customer Class field was manually specified, that value becomes the default for this field. Otherwise, a weighting rule determines the accumulated ABC evaluation from the three calculated methods.

GMROI

Profitability ratio measures the profitability of products and ranks them. The outcome is to identify items with low sales but high profit. Product Administration ABC Inventory Evaluation Report uses this calculation to find GMROI:

Collective gross margin for all sales

Average inventory at cost

Average inventory at cost is calculated when you run the Product Administration Average Inventory Daily Calc Report.

Hits

This represents the number of sales order and warehouse transfer lines this product are displayed on.

Over

If the system-generated stratification ranks fails to measure the importance of the product to a key customer, you can override the final rank by specifying A, B, C, or D. This override value becomes the final stratification rank until the Override Expiration date is passed. An event is generated when a change is made to this field.

Over Expiration

Specify the date the override rank expires.

Sales

This represents the Sales stratification group percent calculated by Product Administration ABC Inventory Evaluation Report.

Stratification Date

The date the ABC inventory stratification values were last calculated by the Product Administration ABC Inventory Evaluation Report.

Frozen

Acquired Date

The Acquired Date is automatically set when the item is first received into the system as inventory. It is also updated automatically if a product is received into the system as a return, unavailable product, or stock adjustment. You can manually change the Acquired Date to override any receipt date due to exceptions that may have arisen, although your security permissions must be set in SA Operator Setup-System Controls to Allow Access to Acquired Date.

Date Available

The date the product becomes available again. Updated when the Days/Times field is updated.

Date Frozen

The month and year the warehouse product was frozen, either manually or automatically by Product Administration Month End Processing Report. A frozen date cannot exist without a number of months specified in the Number of Months Frozen field. This field is not updated by Product Administration Month End Processing Report if the Number of Months Frozen field is 99.

Entered Date

The date the frozen product was created in the system.

Frozen Reason

Select a reason or accept the reason automatically determined by the Product Administration Month End Processing Report. The report does not update this field if the Number of Months field is 99.

Last Occurrence

Updated each time this warehouse product is stocked out. This will tell you when the most recent stock out occurred. This field should not be manually adjusted. These functions automatically update this date:

Transfer Shipping Feedback Entry

When quantity on hand is zero, and the order point is greater than zero.

Transfer Entry

When demand is placed and quantity on hand is zero, and the order point is zero.

Product Unavailable Inventory Entry

When the order point is greater than zero, and the quantity on hand is zero.

Sales Entry Processing Invoice Processing Report

When the order point is greater than zero, and the quantity on hand is zero, or when demand is placed and quantity on hand is zero, and the order point is zero.

Number of Days

This field is accumulative and represents the total number of days in the current month this particular product was not available for sale due to a stock out condition. The number of days is determined when the product is received.

Number of Months

The number of months the product will be frozen. Each time Product Administration Month End Processing Report is performed at month's end and you choose to freeze products, the number of months is decreased until it expires. The month it expires, Product Administration Month End Processing Report picks up the warehouse product and begins processing the record. All new products are automatically set to 6 because at least six months of history must exist before the ordering controls can be established.

If the number of months frozen is 99, the product is frozen indefinitely and ordering controls are not recalculated by Product Administration Month End Processing Report. In addition, the Frozen Date, Frozen Reason, and Number of Months Frozen fields are not updated by Product Administration Month End Processing Report if this field is 99.

Note: Do not manually change this field unless you are freezing it indefinitely.

Stocked Out > 15 Days

Select Yes when there is an extended stock out for 15 consecutive days or the total number of days stocked out in a month totals 15 or more. This option is set during Purchase Entry Receipt of Inventory or Transfer Entry Receipt of Inventory. The Product Administration Month End Processing Report performs these actions:

Sets the Frozen Date field to the appropriate month and year.
Sets the Frozen Reason field to Extended Stockout to reflect a stock out condition has occurred.
Sets the Number of Months Frozen field to the number of months that is used to calculate the usage rate.

The Product Warehouse Product Setup Override Usage balance should be overridden to reflect what would have been used if the stock out had not occurred. The ordering controls are recalculated based on the overridden usage and not the stock out usage (unless that is the desired result). By keeping both the stock out usage balance and override usage balance, the buyer can see what actually happened during the month and what is being used to recalculate the ordering controls.

Total Number of Times

The number of times the product was stocked out during the past month is recorded by Product Administration Month End Processing Report.