Purchase Excessive Safety Allowance Report overview

Purchase > Reports > PO Reports > PORBE

Function acronym: PORBE

Use this report to display products with an order point safety allowance greater than an accepted level, which you define. It is a good management tool to review the safety allowances that are associated with your stock products.

Safety allowance is included in the order point calculation to anticipate usage or lead time variations that may occur. The product quantity that represents your safety allowance is a fixed asset that turns zero times per year. Safety allowance levels must be contained by proven principles to function properly and minimize your inventory costs. It must provide you with the stock to meet your customers' demands without increasing your inventory levels needlessly.

All products experience erratic behavior at some point in time. This report provides information that you can use to make inventory decisions.

These definitions are used in calculations for normal safety, excess safety, and cost to carry excess:

  • Lead Time
  • When a date exists in the Product Warehouse Product Setup-Ordering Last Lead Time and Prior Lead Time date fields and the lead times are more than 180 days apart, the Last Lead Time field is used in calculations. Otherwise, the Product Warehouse Product Setup-Ordering Avg Lead Time field is used. Lead time is divided by 28.
  • Percentage
  • The percentage to use is assigned in the Print Products With Safety Allowance > % report option.
  • Unit Cost
  • The unit cost is based on the SA Administrator Options-Products-Costs Post to G/L By or Post to S/M By option. Addons are added to this cost. When the product is defined as a special costing product in Product Setup, the special costing factor is applied to bring the product cost to a per unit cost.

This is the calculation for normal safety:

  • (Product Warehouse Product Setup Usage Rate * Calculated Lead Time) * (Optional %/100)

This is the calculation for excess safety:

  • Product Warehouse Product Setup-Ordering Safety Allowance Amount - Normal Safety

This is the calculation for the cost to carry excess stock:

  • Excess Safety * Unit Cost * Product Warehouse Description Setup Carrying Cost %