All the ordering policies can be used for any purchased or manufactured Items.
However, Looking at the most general scenarios in the manufacturing industry,Since you already have the Help available through F1, I will not rewrite those definitions again.
Most generally;
Fixed reorder Qty., Max. Inventory options are used for Low value purchase items or regualar consumption Items like Cotton waste for cleaining,Other production consumable etc.
Here, the consumption of such items is either very regualr in all productions and the items are not even defined in BOM for simplicity purposes. Items like certain screws and hardware. Regular Re ordering is done at regualr intervals using the Requisitio work sheet.
Ordering Policies like Order, Lot for Lot are used for high value purchase items which are raw materials in defined BOMs and Semi Finished Goods and Finished Goods manufactured.These items normally follow the Current Sales Order requirements and Forecast entries in the Production Forecast.And are procured after a periodic planning run ( May be monthly, weekly or daily.) on the planning worksheet.
Thank u so much dbd,
Even i read about these field Through F1, i could not get anything.
Could explain what is difference between these fields.
Safety stock quantity, reorder point, reorder quantity,
I getting confused with above fields. I am understanding , but not totally understanding.
Could throw some examples on these fields.
At what conditions we use these fields Maximum order quantity, MinimumOrder Quantity.
Suppose if i fill this fields with some numbers Then where will it reflect.
I waiting for u r cool explanation & answer from u.
I am entrading to everybody, if u have Planning white paper , then send it to me.
I checked partner source, i could not get.
Reorder Point - This is the level of inventory you hold where the periodic usage is covered from this point to the replenishment point. This is a trigger to say “get me more”. This is only used in fixed reorder and maximum environments.
Reorder Quantity - Once the reorder point is hit what is my starting point for a quantity to relenish it with. Only used with Fixed Reorder.
Safety Stock Quantity - This is the quantity you have in stock to protect you against fluctuations in demand. If your reorder point is 15 and you use 5 a week the lead time could be 3 weeks. Then your reorder point is hit and you place an order. The next day a sales order is loaded for 18. Your safety stock helps you here, but be aware of over holding inventory.
Maximum Order Quantity - This is the maximum amount allowed on a replenishment order. After this a second order will be created.
Minimum Order Quantity - Your reorder quantity may not be set, and you may have a minimum allowed amount to order, this is entered here.
When you enter values in these fields the results appear in the planning or requisition worksheets once the system identifies demand that requires planning.
Remember though that you do not have to fill in all of these fields. If you are learning and testing load one field, set a demand, see the results of the replenishment then delete the replenishment, alter or add a field value, and run it again. Hours of endless fun!!
From a Navision perspective just use one of the fields, your scenario really does not mean much, what should happen is the safety stock is removed from the avaialable balance, so if you had 155 in stock and 10 safety stock your available from a planning perspective is 145, but my memory tells me Navision does not work this way, instead I think the safety stock is just used in lot-to-lot, as you cannot have a reorder point, but please check this as it will change version to version!
If you had no reorder point your safety stock is it. So did your sales order of 3 take you below 8? If it did when you run the requisition worksheet it will suggest you buy some.
Order Multiple will suggest you order that quantity, so if your item is shipped in 100’s on a pallet the system should not suggest you buy 2, so you set this to 100, this is different to the reorder quantity, as if this is exceeded it will go to what is required, not the multiple. The reorder cycle lumps replenishments together. In your example if your reorder point was broken in a week it may suggest to order another 50, however if you also had the projected stock going below the reorder point a week after that you would get a second suggestion to order 50 to come in a week after the original. If you set the reorder cycle to 30D you would get one replenishment order at the earliest requirement. Also as this is date based you may have a replenishment order coming in in three weeks, and you may have a sales order due in a week that takes you negative in stock, the system would suggest you moved the original order rather than suggesting a new one if this field was blank (well probably).
What you need to understand is that it is not the relevance of the fields that you need to be concerned about, you need to think about the client and the needs of the client and how to approach a solution they require. If this is just for learning then you need to slowly start populating the fields and seeing the results. As for what you “have” to fill in the answer is nothing. However what you “need” to fill in depends upon what the customer wants.
Lot-for-Lot does not use reorder points, it uses safety stock and the reorder cycle. In traditional MRP this would be considered the “order” policy, but Navision has approached this diffrently by allowing some modifiers to be applied and not strictly limiting the supply and demand.
As for the other fields they change depending upon use and setting so it is very difficult to answer, I am afraid you need to enter some data and play.
I have never seen a white paper, and doubt if one exists.
The reorder point is the amount you always want to keep in inventory, AND the trigger point to reorder.
As you have none in stock the “minimum” you are telling the system you need is 100, as this is the point that “below” an order is triggered. When you set the reorder quantity to 150 the system says, “oh I am below the reorder point, I need 100, hold on I reorder these in 150, so order 150”. It does it in a Danish accent obviously!
If you have no reorder point, but a reorder quantity of 150 it is only when you go below zero will the system tell you to order 150.
Reorder Point = When the projected Inventory goes below this figure, trigger a replenishment order.
Reorder Quantity = When a reorder suggestion is made this is the quantity to suggest.
The reorder point is the MINIMUM stock you should hold.
you have 0, you should have a minimum of 100, therefore it tells you to order 100.
In real life you would not get this situation, you would have 110 in stock, someone would order 30 and the system would plan a replenishment for 20 to come in at the sales shipment date (depending upon modifiers).
Read the post above again, where I define the reorder point and reorder quantity. What do you not understand about those definitions, can you explain this to me.
Project inventory is the projected stock level based upon supply and demand. If you have 0 and are buying 100 the projected inventory will be 100 at the date of teh receipt, it is projected as you have not got it yet, it could be late, or part shipped or anything.