Inventory replenishment or forecasting
This function makes it simple to determine which product items need to be restocked. By default, it displays only the items that require replenishment, but you can view all items by selecting the filter option.
Quantity to purchase: by default, a calculated value is displayed (see calculation method below). You can override this figure by entering a different value.
Free inventory: calculated inventory value = inventory on hand - reserved + incoming.
Reserved: total value of un-fulfilled sales orders that are confirmed or part-fulfilled.
Incoming: total value of the un-received purchase orders. This includes orders with statuses of draft, confirmed, and part-fulfilled.
Trigger minimum qty: the minimum stock holding value you can set for a product, used to calculate the suggested reorder quantity and ensures a minimum quantity is maintained in inventory.
Optimal order qty: the packaged quantity your supplier recommends to purchase in lots of. For example, if Product A is supplied in boxes of 10 units, the suggested reorder quantity will be in multiples of 10.
Calculation method
The suggested Quantity to purchase is calculated using the formula
Quantity to Purchase = Reserved - (Inventory On Hand + Incoming)
If the result is less than the Trigger min qty (if set), the system will use the Trigger min qty instead.
If an Optimal order qty is set, the final suggested quantity will be rounded up to the nearest multiple of the Optimal Order Qty.
Formula breakdown:
To calculate how much more you need to buy to meet current demand:
You start with how much is needed (reserved),
then subtract what you already have or will soon have (inventory in hand + incoming).
Watch a quick video on creating a purchase order from a sales order:
