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  11. Calculating ROP (DC1 Stock...

Calculating ROP (DC1 Stock Control)

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Note: This only applies if DC1 Inventory Control is not installed.

The Reorder point (ROP) represents the stock level at which it is time to place a purchase order or an internal replenishment order. When you run the Create purchase suggestion or Create Internal replenishment suggestion menu item, the available stock level is compared with the calculated ROP. If the available stock level has fallen below the ROP, it is time to purchase the item. See About purchase suggestions (DC1 Stock Replenishment) for more information.

Formula
The following formula is used to calculate ROP:

(Annual forecast * Planning time) / Number of workdays/year

Three parameters are involved when calculating the planning time (see About planning time for more information). These include:

  • Administation time, defined in the DIS control file
  • Lead time, defined in the Item/Supplier file
  • Transport time, defined in the Supplier transport time table

Note: The annual forecast is defined in the Item file for each item. The number of workdays/year is defined in the DIS control file.

Prerequisites
The following information must be defined if you want the system to calculate ROP for an item. The system will calculate the ROP for all items where these prerequisites apply.

  • Time axis in the Item file, Inventory information panel must be be set to NO.
  • Item class in the Item file, Inventory information panel must be set to 1.
  • OP calculation code in the Item file, Inventory information panel must be set to YES.
  • An annual forecast must be defined in Annual forecast in the Item file, Inventory information panel. Note: The annual forecast is the quantity you forecast to sell (deliver) during the year.
  • A lead time must be defined for the main supplier in the Item file, Supplier information file panel since the lead time is used when calculating the planning time.

Note: Administration time and Transport time, which are also used to calculate the Planning time, are not mandatory.

When the calculation has been performed, you can view the calculated ROP in the Order point field (Item file, Inventory information panel).

Enquiries and printouts

  • Item file enquiry
  • Item file printout

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