FAQ #: 83
How does the system figure out what I need to buy?

Items set for automatic purchasing:

Each inventory item has several fields, called purchasing parameters, defined on the Inventory Master File. These fields control the method the system uses to calculate average monthly usage, order point, and the suggested purchase order quantity. The Inventory Review Reports and the Inventory Month End Processing program use these parameters to calculate average monthly usage, order point, suggested purchase order quantity, and action level. These fields are then used to help the system determine when and how much of an item to suggest for purchasing. If you do not agree with the items, or quantities, being suggested for purchasing on an item, you should review the purchasing parameters defined for that item. These parameters are controlled on an item basis, because different items may have different stocking needs.

Items set for non-automatic purchasing:

Items that are defined for frozen, or manual, purchasing control do not have an average monthly usage or an order point, or an action level calculated automatically. Generally, new items are defined for non-automatic purchasing until they have had time to build up enough history to be used in calculating these fields. Non-automatic items can have their order point and normal ordering quantity (suggested quantity to buy) entered/maintained manually. Non-automatic items are basically suggested when they are at or below their order point (just like automatic items, but the order point must have been entered manually or the item will be suggested when it reaches zero availability). The quantity to buy is then suggested based on the suggested ordering quantity and any back order quantities. If an item does not have a suggested ordering quantity defined, then the quantity suggested will be basically the back order quantity. There is a configuration option that will calculate a suggested purchase order quantity on non-automatic items based on the order point. Remember that the order does have to be entered manually for non-automatic items:

Sug. P/O Qty = Order Point - Qty on Hand - Qty On Order + Qty on B/O

This calculation will basically suggest purchasing enough of an item to get you back to order point on non-automatic items.

Non-stocking Items defined for non-automatic purchasing:

Items that are setup in inventory but are defined as "non-stocking" items, will have their suggested purchase order quantity defined as:

Sug. P/O Qty = Qty on B/O - Qty on Hand - Showroom Qty - Qty on Order

The idea is that these are non-stock items so there is no need to purchase any other than what is necessary to fill outstanding back orders.

Items entered as Non-Stock on Orders:

Items entered as non-stock items on orders are added to the Suggested Purchase Order Review each night by the Daily Invoice Register. The quantity of these items to purchase suggested is the actual back order quantity. These are special order items that are not defined in inventory, therefore you will not need any extra's for stock.