Ordering controls

Understanding ordering controls is crucial to effective inventory management. Ordering controls answer two questions, with respect to product replenishment: when and how much. The when question is answered by the line point and order point calculations. The how much question is answered by the order method.

Ordering controls consist of these five values:

• Order quantity
• Order point
• Line point
• Usage rate
• Safety allowance

These values are recalculated when Product Administration Month End Processing Report is processed. The timing of replenishment depends on the order point and line point, and the order quantity depends on the order method and purchasing parameters selected. The usage rate and safety allowance are values that are used in the line point, order point, and order quantity calculations.

Distribution SX.e provides a variety of order methods from which to choose. These order methods are applied on a product-by-product basis and are set up in Product Warehouse Product Setup-Ordering. The method you select for a product may be governed by the type of product, vendor requirements, and product cost. The order methods available are classification, min/max, Economic Order Quantity (EOQ), human, blanket, and quantity break.

The Product Line Setup and Product Warehouse Description Setup records contain purchasing parameters for product lines and warehouses. These records are used by Product Administration Month End Processing Report if they contain values other than zero when ordering controls are recalculated.