The inventory management information calculated by the system is used to create IR suggestions. These suggestions provide all the information you need to decide if it is time to make an internal replenishment of stock for a specific item in a specific warehouse.
DC1 Inventory Control analyses the requirements at warehouses supplied from other warehouses, as well as at warehouses supplied from external suppliers:
- The system creates IR suggestions for items at internally supplied warehouses
- The system creates purchase suggestions for items at warehouses that are supplied from external suppliers. See About working with purchase suggestions (DC1 Inventory Control) for more information
Note: The value in the Supplied from whs field in the Item file defines if the warehouse is supplied internally or externally.
The system reviews the availability situation of your stock, and uses information like:
- forecasted demand per time unit
- variation in demand
- length of planning time
- how often you place an internal order to a certain warehouse
- degree of reluctance to risk a shortage in stock
and creates suggestions based on this information. The result is an IR suggestion that can be maintained and converted to a purchase order.
Note: See About working with internal replenishment orders (DC1 Inventory Control) for information about how to copy IR suggestions to IR orders.
Purchase types
Each item/warehouse combination in the system is assigned a purchase type in Purchase type in the Item file. There are three different methods, purchase types, which can be used when items are purchased. However, for internally supplied items, the only valid type is Purchase type 1.
Note: The Purchase type field can be globally updated through the fast update function. See About working with fast updates for more details.
Purchase type 1
Purchase type 1 items are managed according to a traditional reorder point system. Purchases are initiated when a certain stock level is reached. The system performs a continuous review of ROP and SST, providing internal replenishment suggestions based on this review.
It assumes that it is possible to place a replenishment order at any time. Co-ordination with other items is not taken into account and there is no inspection interval. You simply replenish when your stock level reaches the reorder point.
The available stock level should be checked against the ROP as frequently as possible. See About reorder point and safety stock (DC1 Inventory Control) for more information.
Purchase codes
A purchase code is assigned to each of the three purchase types in the IC control file. These codes define the suggested quantity to purchase for each purchase type. The purchase code fields are:
- Purchase code, type 1
- Purchase code, type 2
- Purchase code, type 3
Internal replenishment suggestion review
The accuracy of internal replenishment suggestion lines can be controlled by setting up review criteria for segments of your stock. The review criteria are established in the Purchase review control code table, and are linked to item/warehouse records in the Item file.
When an internal replenishment suggestion line meets the review criteria, the Review field will be set to YES indicating that the line should be reviewed before being converted to an internal order line. If one internal replenishment suggestion line is marked for review, then the entire internal replenishment suggestion is also marked for review at the header level.
Note: See About working with inventory control codes for information about how to set up these codes.
Internal replenishment suggestion calculations
This section describes the calculations that are performed in the internal replenishment suggestion program.
Basic replenishment time calculation
The basic replenishment time and actual replenishment time are calculated as follows:
| Lead time Transportation time Administration time + Extra planning time = Basic replenishment time |
Reorder point (ROP) and safety stock (SST) calculation
ROP and SST are calculated for all item/warehouse records in the Item file during the inventory calculation. These values are not recalculated during the creation of the internal replenishment suggestions.
Note: These values are, however, recalculated for purchase suggestions. See About working with purchase suggestions (DC1 Inventory Control) for more information.
Available stock level calculation
| (Physical stock + Purchase order quantity) (Returns to supplier + Sales order quantity + On pick list) = Available stock level for time axis items |
The purchase order quantity and sales order quantity are the quantities on sales orders and purchase orders within the replenishment time. For non-time axis items, it is the total item quantity on all purchase/sales orders.
Reorder point deviation (ROPD) calculation
The ROPD represents how much the stock level has fallen below ROP. Basically, if ROPD for an item/warehouse combination is greater than zero it is time to make a purchase.
| ROP – Available stock = ROPD |
Suggested purchase quantity calculation
The suggested purchase quantity is determined by the purchase code fields in the IC control file.
On the start panel of the internal replenishment suggestion creation program you can enter a value in Extra quantity %. The suggested quantity for all items on the suggestion will be raised by the defined percentage. The raise is applied before rounding to correct pack size and conversion to the right purchase unit.
Enquiries and printouts
- Internal replenishment suggestion enquiry
- Internal replenishment suggestion printout
Related topics
- Create an internal replenishment suggestion automatically (DC1 Inventory Control)
- Create an internal replenishment suggestion manually (DC1 Inventory Control)
- Review and confirm an internal replenishment suggestion line (DC1 Inventory Control)
- Reorganise internal replenishment suggestions (DC1 Inventory Control)
- About reorder point and safety stock (DC1 Inventory Control)
- About working with fast updates
- About working with internal replenishment orders (DC1 Inventory Control)
- About working with inventory control codes
- About working with purchase suggestions (DC1 Inventory Control)
- About DC1 Inventory Control