Defining the Maximum Day's Supply for Products

Define a maximum number of days' supply of a product that your company permits to be maintained in inventory. Defining a maximum number of days' supply keeps your inventory at an efficient level so that you do not keep unnecessary stock in your warehouse.

The system checks whether a product's current maximum days' supply is greater than a limit set for the individual product, buy line, or all products. This check also prevents you from bringing unnecessary stock into your warehouse and moving inventory in quantities greater than what you sell. The system makes this check whenever a product is placed on an sales order, purchase order, transfer order, or inventory adjustment.

The system uses the following calculation to determine the product's projected maximum days' supply:

Product Projected Maximum Days' Supply = Product's projected inventory level (PIL) / Demand per day

You can define maximum days' supply at three levels:

Branch - Applies to all products, unless overridden at the buy line or product level. The Maximum Days Supplycontrol maintenance record defines the maximum days' supply default for each branch. The branch default is used when products do not have maximum days' supply set at the product or buy line level.
Buy Line - Applies to all products assigned to the defined buy line, unless overridden at the product level. The buy line level overrides the branch default parameters.
Product - Applies to the defined product and overrides the buy line and branch default parameters. The maximum days' supply checking logic does not apply to products with a status of MiscCharge.

When an item is added to a transaction, the system checks the PIL. If an item fails the check, the system warns that you are about to affect inventory levels set to the maximum days' supply limit. The warning displays the item's part number, description, PIL, daily demand, and its projected maximum days' supply.

If you have the corresponding PIL override authorization key (AOE.PIL.DAYS.OVRD, POE.PIL.DAYS.OVRD, SOE.PIL.DAYS.OVRD or TOE.PIL.DAYS.OVRD) assigned, the message has a Continue (Y/N) prompt. Otherwise, the message prompts you to enter the password of another user who is authorized to override the maximum days' supply limit.

For example, you set the system default for maximum days' supply to be 456. Product A has a daily demand of 0.03 and a PIL of 12. The system calculates that the maximum days' supply is 400. This product is not in violation of the maximum days' supply limit. A purchasing agent attempts to meet a vendor target by manually adding 3 more of Product A to a purchase order. Product A's PIL increases to 15 and its maximum days' supply to 500. The system warns the purchasing agent that including this product on the purchase order in this quantity violates the maximum days' supply limit.

If an item is removed from a transaction, or the transaction is deleted, the system compares the PIL at the time of the removal or deletion to a stored PIL. If the removal or deletion does not make the PIL higher than it was at the time of the addition, no maximum days' supply warning displays.

To define the system default maximum days' supply:

From the System > System Files menu, select Control Maintenance to display the Control Maintenance window.
In the Keyword field, enter max day supply to display the Maximum Days Supply control maintenance record window.
Double-click the description to display the Maximum Days Supply window.
In the Branch/Territory field, enter the branch or territory you want to select. Enter All to select all branches and territories. The default is All.
For each branch, enter the maximum days' supply that your company permits to be stocked for all products in the warehouse.

Note: We recommend setting the system default to 99999. This causes the system to warn users when they attempt to purchase or transfer nonstock items that have a daily demand of 0.

Click Save to save changes and exit the screen.

To define the maximum days supply for a product:

From the Files menu, select Product to display the Product Maintenance window.
Select a product.
From the Inventory menu, select Primary Inventory Maintenance to display the Primary Inventory Maintenance window.
From the Edit menu, select User Controls to display the Product User Controls Parameter window.
From the Additional Controlsmenu, selectHits Maintenance / Max Days' Supply to display the Hits Control Maintenance window.
In the Central Warehouse Type field, enter Top-Down or Bottom-Up to define which type of warehouse you are working with.
Use the Find menu as necessary to locate a branch that is in the list, but not in the viewable area, add a branch or territory to the list, or remove a branch or territory from the list. Select the branch to which you need to make changes.

Note: The new branch or territory inherits the settings of the previous entry.

In the Max Days Supply field for a branch or territory, enter the maximum days' supply of the product that your company permits to be stocked in the warehouse.
Set hits control parameters, as needed
Press Esc to save changes and exit the screen.