To specify the minimum and maximum inventory

This topic describes how a supplier in a vendor managed inventory (VMI) setup can perform supply planning based on the minimum and maximum inventory level that the customer should have in inventory.

Safety stock and maximum inventory level of an item

If a valid terms and conditions agreement prescribes a minimum inventory, LN ignores the item's safety stock set up for the customer's warehouse.

If a valid terms and conditions agreement prescribes a maximum inventory, LN ignores the item's maximum inventory level set up for the customer's warehouse.

If the terms and definitions do not prescribe a minimum inventory on a particular date, LN applies the item's safety stock. Similarly, if the terms and definitions do not prescribe a maximum inventory on a particular date, LN applies the item's maximum inventory level.

You can define an item's safety stock and maximum inventory level in the Items - Ordering (tcibd2500m000) session or the Warehouse - Item (whwmd2510m000) session.

Methods to specify inventory levels

You can define the required inventory levels in the following ways:

  • Fixed inventory levels
  • Time-phased inventory levels
  • Inventory levels based on the number of days of supply

You can find the fields mentioned in the following sections in the Terms and Conditions Line (tctrm1620m000) session, on the Planning tab.

To define fixed inventory levels

To define fixed levels for the minimum inventory or the maximum inventory, complete the following steps:

  1. Set the Min-Max Specification field to By Quantity.
  2. Enter the required inventory levels in the Minimum Inventory Level field and the Maximum Inventory Level field.
To define time-phased inventory levels

To define time-phased levels for the minimum inventory or the maximum inventory, complete the following steps:

  1. Set the Min-Max Specification field to By Quantity.

  2. Enter the required inventory levels in the Planning Inventory Levels (tctrm1136m000) session.

    To start the Planning Inventory Levels (tctrm1136m000) session, in the Terms and Conditions Line (tctrm1620m000) session, open the Planning tab, and then, on the appropriate menu, click Inventory Levels.

To define number of days supply

For instructions how to specify the minimum and maximum inventory levels by defining the number of days supply, refer to Planning based on number of days supply.

Note

When the customer approves a forecast revision, the maximum and minimum levels are frozen for that revision.

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