Reviewing Purchase Order Suggestions

The system calculates suggested purchase orders using different variables, depending on how your warehouse and buying parameters are set. For example, the system calculates differently if there is a short buy (emergency buy) than if there is a line buy. In addition, the system takes into account what minimum and maximum parameters are set as well as any service stock requirements.

Use the Suggested PO Audit utility to drill into the suggested purchase order results and see how the system determined what to suggest to buy. The audit displays in an inquiry window and can be printed or saved in your hold file as a report.

You can also display the Transfer Surplus Queue or the Suggested P/O Detail Queue for more information before running the audit report.

To review purchase order suggestions:

Display and sort the Suggested P/O Queue for your company.

From the Filemenu, select View Report to display the report viewer and select any line item on the report.

From the Detail menu, select View Detail or Edit Detail and select Suggested P/O Audit to display the audit detail and review the purchase order suggestion calculations.

Note: You cannot display the audit information from a report in your hold file.

Save the results to your hold file, if you want to save these results to compare data at a later time.

Regardless of the type of buy, when determining the suggested purchasing quantities the system first checks which procurement path your warehouse uses and then determines what branches to display for the products. The product buy package quantity and divisibility impacts the amount to purchase. The system calculates what products are

short (emergency) buys and then calculate the

line buy.

Line Buys

The system calculates line buys for product buy lines using the following process after determining quantities, procurement paths, and buy packages. The system completes each step before considering the next calculation:

Step	Description
1	Find the lead time in the purchasing branch.
2	Determine the lead time order cycle from the buy line.
3	Identify the lead time safety days.
4	Add the results of Steps 1 through 3 for the lead cycle safety days value.
5	The value in Step 4 displays on the Suggested P/O Report in the LCS column. Note:Only the purchasing branch's LCS displays on the Suggested P/O Report.
6	Multiply the lead cycle safety days value by the daily demand of each branch.
7	Round up the value in Step 6 to calculate the line point for the product.
8	Compare value in Step 7 to the calculated economic order quantity (EOQ). The system uses the greater value.
9	Compare the value in Step 8 to the projected inventory level (PIL) of the product. If the value is greater than the PIL, the system calculates the difference and rounds up by the buy package quantity.

Short (Emergency) Buys

The system calculates short buys using the following process after determining quantities, procurement paths, and buy packages. The system completes each step before considering the next calculation:

Step	Description
1	Find the greater lead time in the network (determined procurement path) and determine whether to use it for each branch on the list.
2	Use calculated lead time from Step 1 to calculate safety days.
3	Find daily demand for each branch. Daily demand is considered with the trend percentage or auto-trend data.
4	Find the hits related safety coefficient (HRSC) factor for each branch.
5	Round up the daily demand and multiply by the lead time stock that has the greater lead time in the network (determined procurement path).
6	Calculate the safety stock using the lead time in Step 5 and apply the lead time variable.
7	Multiply the safety lead time by the HRSC factor for each branch.
8	Multiply result of Step 7 by the demand per day for each branch.
Check Point	The lead time stock and safety stock for each branch is available to display on the audit report.
9	Add the lead time stock and safety stock and compare to the projected inventory level (PIL) of the branch.
10	Unless you use a Distributive Purchasing warehouse, add all needs at each branch.
11	Check if safety stock should be added to the product at the branch. This would increase the amount of short stock to display on the Suggested P/O Report.

What the Suggest P/O Audit Report Shows

The audit displays some of the calculations at the bottom of the Suggested P/O Audit. How the system calculates the short and line buys depends on the procure group associated with the product.

Your warehouse scheme determines how you replenish stock for your company. The procurement path you use affects the way the system builds the audit report:

Short # / Line Qty	Column	Description / Use on the Audit
Both	Br	The purchasing branch and the branch for which this branch purchases. To check the procure group on a product, review the product file in Product Maintenance. To check the procurement group ID, see Assigning Procurement Groups.
	BuyPkg	The buy package quantity set up at the branch as indicated in the Additional Inventory Parameters of the product file. The letter after the number indicates if the buy package quantity is divisible: Yes, No, or Only.
	Lead Time Used	The lead time used for this suggested purchase order. Note: For a distributive and central purchasing procurement group, the system gets the lead time from the purchasing branch.
	HRSC	The hits related safety coefficient (HRSC) defined at the branch. The HRSC factor displays in the product's order point information.
	Demand Per Day	The demand per day for each product listed. The system pulls the value from the branch's order point information. The system may take Trend% or Auto-Trend% values into account.
	PIL	The projected inventory level of the product in the branch. The amount you have on hand, minus the amount committed to orders, plus the amount coming in on transfers and purchase orders.
	Service Stock	The total service stock defined for the product at the branch added to the calculated short and line buys.
	Grace Days	Grace days are not used on distributive or central purchasing purchase orders.
Short #	Lead Time Stock	The sum of LT Used multiplied by the demand per day. This is the quantity needed based on the lead time and demand of the product in the branch. This value is what you need in the warehouse to supply your normal order demands.
	Safety Stock	The lead time value calculation multiplied by the demand per day. This quantity is what you need on your shelves to keep a buffer for any exceptional sales that may come in.
	Order Point Used	The order point used for the audit. The lead time stock plus the safety stock, rounded. The system indicates if a Min/Max (capital M) or a Min Only (lowercase m) for the order point based on the setting in User Control Parameters.
	Grace Quantity	Grace quantity is not used on distributive or central purchasing purchase orders.
	Quantity Short	Order Point Used minus the projected inventory level (PIL). Note: The system applies grace quantity to this value, if the calculated number is positive and the warehouse branch equals the purchasing branch.
Line Qty	Line Buy Days	Line buy days used to calculate this suggested purchase order.
	LCS Days	The lead time plus the order cycle used plus the safety stock. The system uses the LT Used and adds the LB Days calculated on the suggested purchase order. The system uses the resulting value to calculate the safety days by applying the lead time variable.
	EOQ	Economic order quantity for the product in the branch. This is the most cost-effective quantity of a product for you to purchase and hold in inventory.
	Line Point Used	Line cycle safety days multiplies by the demand per day, rounded. The system indicates if a Min/Max (capital M) or a Min Only (lowercase m) for the order point based on the setting in User Control Parameters.
	Line Buy	Line point value minus the projected inventory level (PIL).
	Line Buy / Package Qty	Round up the line point. Note: If EOQ is greater than the line point, the system uses EOQ and rounds up.

Short # / Line Qty	Column	Description / Use on the Audit
Both	Br	The purchasing branch and the branch for which this branch purchases. To check the procure group on a product, review the product file in Product Maintenance. To check the procurement group ID, see Assigning Procurement Groups.
	BuyPkg	The buy package quantity set up at the branch as indicated in the Additional Inventory Parameters of the product file. The letter after the number indicates if the buy package quantity is divisible: Yes, No, or Only.
	Lead Time Used	The lead time used for this suggested purchase order. The system compares the lead time at the purchasing branch to the transfer cycle of the branch and uses the greater value for the lead time.
	HRSC	The hits related safety coefficient (HRSC) defined at the branch. The HRSC factor displays in the product's order point information.
	Demand Per Day	The demand per day for each product listed. The system pulls the value from the branch's order point information. The system may take Trend% or Auto-Trend% values into account.
	PIL	The projected inventory level of the product in the branch. The amount you have on hand, minus the amount committed to orders, plus the amount coming in on transfers and purchase orders.
	Service Stock	The total service stock defined for the product at the branch added to the calculated short and line buys.
Short Buy	Lead Time Stock	The sum of LT Used multiplied by the demand per day. This is the quantity needed based on the lead time and demand of the product in the branch. This value is what you need in the warehouse to supply your normal order demands.
	Safety Stock	The lead time value calculation multiplied by the demand per day. The quantity that what you need on your shelves to keep a buffer for any exceptional sales that may come in.
	Grace Days	The number of days so child branches with large quantities of stock can retain some of the quantities before returning the stock to the parent branches as indicated in the Default For Excess Grace In Buy Line Maintenancecontrol maintenance record.
	Order Point Used	The order point used for the audit. The lead time stock plus the safety stock, rounded. The system indicates if a Min/Max (capital M) or a Min Only (lowercase m) for the order point based on the setting in User Control Parameters. Note: If an asterisk (*) displays in this field, the system used the Line Point for suggestion calculation based on the Short Buy Quantity Methodcontrol maintenance record.
	Grace Quantity	Grace days multiplied by demand per day.
	Quantity Short	Order Point used minus the projected inventory level (PIL).
Line Buy	Line Buy Days	Line buy days used to calculate this suggested purchase order.
	LCS Days	The lead time plus the order cycle used plus the safety stock. The system uses the LT Used and adds the LB Days calculated on the suggested purchase order. The system uses the resulting value to calculate the safety days by applying the lead time variable.
	EOQ	Economic order quantity for the product in the branch.
	Line Point Used	Line cycle safety days multiplies by the demand per day, rounded. Minimum-only is in effect when a lower case "m" displays after the EOQ value. If there is a min/max order point set for the product, an upper case "M" displays after the EOQ value.
	Line Buy	Line point value minus the projected inventory level (PIL).
	Line Buy / Package Qty	Round up the line point. If economic order quantity (EOQ) is greater than the line buy, the system uses EOQ and rounds up. For example: LP (line point) 126 minus PIL 111 = LB (Line Buy) 15 The system compares the line buy of 15 to the EOQ of 117 and selects the higher of the two. In this example, the system selects the EOQ of 117. The system then rounds to the nearest buy package of 25 to equal 125. The 125 is then shown in the Line Buy / Package Qty column.

Reviewing Purchase Order Suggestions

What the Suggest P/O Audit Report Shows

Distributive and Central Purchasing

Central Warehouse and Central Distribution