Purchase Entry Recommended Replenishment Action Report overview

Ordering controls

Replenishment options depend on sound ordering controls. Order points and line points are customer service controls. Controls maintain enough stock to meet customer demand. The order quantity affects your inventory turnover. The objective is to find an optimum level of customer service and inventory turns. Analyzing each product in your warehouse would be difficult and time consuming. Each product within a product line usually has similar characteristics and contributes a similar gross margin. Grouping products makes analysis more convenient. Combining the products for report purposes, and vendor line buying parameters, benefits your productivity and organizes your records.

Line buying can be challenging because of the restraints it places on your ordering controls. You can use calculated product line review cycles and line points to place purchase orders only when you require inventory, in the correct quantities, and, often, taking advantage of total order savings offered by the vendor. Line buying offers a predictable, consistent, cost effective method that helps remove the guesswork from purchasing and assures you are efficiently controlling excessive inventory carrying costs.

Timeliness and solid ordering controls are critical to the usefulness of reports that contain information needed for purchasing decisions. It is equally important that the information be relevant to the decision at hand and the formation be accurate. The foundation of any report is accurate input. People make decisions, and people bring to the decision-making process their experience, values, and knowledge that cannot be incorporated into a report. But, the PO RRAR is a tool your buyers can use to make critical purchasing decisions.

Running the report

The PO RRAR can be processed as a stored report. You can schedule it to run at night. A stored report that is set up with @rrxxx as the job name, where xxx represents the buyer’s initials, generates a report with the ranges and options selected. For example, for buyer ABC, you set up a stored report with job name @rrabc and the required ranges and options.

You can also generate the PO RRAR from Purchase Demand Center Entry. Run the report to review stock and product lines when, for example, the product's review cycle is due, or a product in a line drops below order point, or the nonstock or special totals more than one-half of a target buy.

After you run the report, analyze and make adjustments to the line items and then accept and merge one or more reports into a purchase order.

Other functions

The Vendor Ship From Setup record autofills ship-to information to the ship via, substitute, and back order fields on the report header for the products that are selected by the PO RRAR. If a Vendor Ship From Setup record does not exist, this information autofills from the Vendor Setup record.

For Storeroom-managed warehouses, the Customer On hand balance and Critical Product flag from Product Warehouse Product Setup is included on the report

Customer forecasts and replenishment

With customer forecasting, the calculations for selecting stock products include additional steps to account for expected forecast quantity. Active forecasts are selected by warehouse, product, and forecast start and end dates. If you select Include Lead Time and specify a Ramp Up Days in SA Administrator Options-Products-Replenishment, those days are added to the start and end dates when searching for active forecasts. The calculated quantity to purchase for all active forecasts is added to the order point and line point values from Product Administration Month End Processing Report, then these adjusted values are compared to the purchasing net available to determine which stock products to recommend for replenishment.

For stock products recommended for replenishment, the purchase quantity is calculated for the stock item, then the calculated forecast quantity to purchase for all forecasts is added to that quantity. Finally, standard pack rounding and vendor pricing adjustments are made and that value is assigned to the line item on the Purchase Order Recommended Replenishment Report.

The total quantity to purchase for all forecasts, Customer Forecast Qty, is printed on this report when the quantity is greater than zero.

Calculating the quantity to purchase for customer forecasts

The calculated quantity to purchase is dependent upon whether you use Lead Time Days or the Review Cycle quantity in the calculation. Select Include Lead Time in SA Administrator Options-Products-Replenishment to allow for longer lead times when selecting forecasts and determining the quantity to purchase. When you include lead time, the calculated quantity to purchase is the remaining forecast quantity or the estimated monthly forecast, whichever is less.

Using Review Cycle quantity:

If you do not select Include Lead Time, the calculated quantity to purchase is either the remaining forecast quantity or the review cycle quantity, whichever is less.

The remaining forecast quantity is calculated as:

Estimated total forecast quantity - total actual forecast usage quantity - quantity on order

These values are used in the calculation:

Estimated total forecast quantity = total forecast quantity * expected run rate percent from Product Customer Reservation/Forecast Setup

Estimated monthly forecast = forecast quantity for the current month * expected run rate percent from Product Customer Reservation/Forecast Setup

Quantity on order = the sum of the quantities currently on order in stages 1, 2, or 3 where the customer, forecast group, warehouse, and product match the report selection criteria and for which usage is being recorded

The review cycle quantity is calculated with consideration of the number of days until the end of the forecast. If the number of days until the end of the forecast is less than the review cycle days, then this calculation is used to determine the review cycle quantity:

Estimated monthly forecast / 28 * days until the end of the forecast

If the number of days until the end of the forecast is greater than or equal to the review cycle days, then this calculation is used:

Estimated monthly forecast / 28 * review days

Including Lead Time:

If you’re including Lead Time in the calculation, the quantity to purchase is calculated with consideration of when the forecast period ends, before or after the replenishment review period. If the Include Lead Time option is selected, this calculation is used to determine the days until the end of the forecast:

Forecast end date - system date - Lead Time

The quantity to purchase is the remaining forecast quantity or the estimated monthly forecast, whichever is less.

If you specify Ramp Up Days in addition to selecting the Include Lead Time option, the ramp-up days are added to the calculation used to determine the forecast date:

Current date + Lead Time + Ramp Up Days

The ramp-up forecast record is used if there is no current customer forecast record for the same customer/ship to/product.