[Karen Vernon]

Hello All,

I have an item set up with stockkeeping units for multiple locations.  

Location 1 – Quantity on hand 0, Reorder Point 6, Reorder Quantity 2.  
Location 2 – Quantity on hand 2, Reorder Point 6, Reorder Quantity 2.

When I run the Requisition Worksheet, the system is returning a result of 8 for location 1 and 6 for location 2.  

Has anyone run into something like this?  Any ideas on how to fix this?

Thanks,
Karen  

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Karen Vernon
Melco Industries
Westminster CO
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[Greg Hartunian]

Hi Karen, 

It seems that it is working more like a min/max (ordering up to 8) instead of ROP with fixed OQ.  However, ordering just 2 given zero on hand inventory will never get you back to your ROP in this situation so you create a situation where there is likely to be perpetual backorders/lost sales unless more is ordered.  If demand has dropped considerably after you created the reorder point, then maybe a lower reorder point is better. 

Location 1 – Quantity on hand 0, Reorder Point 6, Reorder Quantity 2.  
Location 2 – Quantity on hand 2, Reorder Point 6, Reorder Quantity 2.

When I run the Requisition Worksheet, the system is returning a result of 8 for location 1 and 6 for location 2.  

Has anyone run into something like this?  Any ideas on how to fix this?

Karen Vernon,  Jul 27, 2022 01:44 PM

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Greg Hartunian
President & CEO
Smart Software, Inc
http://www.smartcorp.com
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[Karen Vernon]

Thanks everyone!  Your explanations helped.  

I appreciate your comments.  

Karen

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Karen Vernon
Melco Industries
Westminster CO
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[Robb Delprado]

Hello Karen,

Your reorder point is causing the issue.  It says, when I get below 6, order 2.  But when the system sees ordering 2 doesn’t bring you above the reorder point, it says order 2 more and when that additional 2 doesn’t bring you above the reorder point, it wants to order 2 more.

What is your goal?

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Robb Delprado
Senior Trainer and Consultant
New View Strategies
robb@newviewstrategies.com
860.558.8032
Houston, TX
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[Devraj Ghosh]

So you want to setup Fixed Reorder in a min/max fashion. So reorder point represents the min and reorder quantity represents the max. If the inventory drops to or below the reorder point, the system will order up to the reorder quantity.

 

In your case, the results seem accurate. For loc1, the inventory is 0, so the system will meet the reorder point (6) + reorder quantity (2), so you get a total of 8 here.

 

In the second scenario, you have 2 on hand, so it meets reorder point of 6 which is 4 in this case  + reorder point of 2 = 6.

 

I would set the reorder quantity to be greater than reorder point as that is normally how we have them set to represent min/max.

 

Thanks

 

 

Sent from Mail for Windows

 

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