Reorder Points and Desired QOH Levels
Reordering
HandiFox lets you define reorder points and desired QOH levels for
every item on every site. A Reorder Point is a specific level at which your products need to be replenished. In other words, it tells you when to place an order, so you avoid running out of stock. Based on this information, HandiFox can generate purchase orders to replenish your stock when needed (see Automatic Replenishment).
Reorder Point is the minimum quantity that you would like to have in stock at all times. Items that are below their reorder points will be included on the next purchase order you generate with HandiFox (based on reorder points and desired levels).
- Desired QOH is the quantity you want HandiFox to target when generating a replenishment purchase order.
- Case Size comes in handy if your vendor supplies items only in batches of the defined quantity. For example, pens can be supplied only in packs of 100 pens. It means that the ordered quantity should be times 100. So, you may set the Case Size to 100 in this case and the ordered quantity will be rounded to hundreds. The way of rounding is specified in the Reorder Rounding column.
- Reorder Rounding allows selecting whether to round up or
down or to the nearest value when the item has a certain case size. As in the example above, the case size (pack) for pens is 100, meaning the quantity to be replenished will rounded to hundreds.
There are three options:
- To nearest: if the quantity to be ordered in order to match the desired QOH, divided by the case size results in a fractional decimal number, the quantity to replenish is rounded up if the fractional number is 0.5 or higher and, if it is lower than 0.5, the quantity to replenish is rounded down. Continuing with the example above, let us say that our calculations determined that we need to order 452 black pens (or 4.52 packs). Since we can only buy pens in packs of 100, the quantity to be replenished needs to be rounded up to 500 (or 5 packs). Now, we have determined that we need to order 236 blue pens (or 2.36 packs). Since we can only buy pens in packs of 100, the quantity to be replenished is rounded down to 200 (or 2 packs)
- Up to nearest: if the quantity to be ordered in order to match the desired QOH, divided by the case size results in a fractional decimal number, the quantity to replenish is rounded up to the closest next whole number. For example, we have determined that we need to order 236 blue pens (or 2.36 packs). Since we can only buy pens in packs of 100, the quantity to be replenished is rounded up to 300 (or 3 packs).
- Down to nearest: if the quantity to be ordered in order to match the desired QOH, divided by the case size results in a fractional decimal number, the quantity to replenish is rounded down to the nearest whole number below it. For example, we have determined that we need to order 236 blue pens (or 2.36 packs). Since we can only buy pens in packs of 100, the quantity to be replenished is rounded down to 200 (or 2 packs).
HandiFox calculates what products are running low and should be reordered:
- It takes current QOH values, adds quantity on open PO and subtracts quantity on open Sales Orders.
- If the resulted quantity is less or equal to the reorder point, then this product should be reordered.
- If the resulted quantity is negative, then it should be reordered as well.
The formula to calculate the quantity to be replenished is: QTY to replenish = Desired Quantity on Hand - Quantity on Hand - Quantity on Open Purchase Orders + Quantity on Open Sales Orders.
If the calculated replenishment quantity is 0 or less, then the product is not reordered and it will not be shown on the list.
Quantity on Open Purchase Orders and Quantity on Open Sales Orders can be excluded from calculations.
To assign these values for your items, go to Inventory → QOH Viewer and click Reordering at the top-right corner of the page. Select the Site for which you will be defining these parameters, then enter them in their respective columns. When you are finished, click Save.
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