Reorder methods are used in Jiwa to calculate suggested purchase order quantities based on stock requirements, sales history, stock on hand, outstanding purchase orders, backorders, minimum stock settings, and forecast demand.
The reorder methods available depend on where the purchase order is being created. Some methods are available when creating a single purchase order from Purchase Order Entry, while other methods are available when creating purchase orders in bulk using Purchase Order Generation.
Custom reorder methods
Jiwa can support custom reorder methods where the standard replenishment options do not meet the needs of your business. Custom reorder methods can be developed to reflect different purchasing rules, stock planning requirements, supplier arrangements, or forecast calculations.
If your business requires a different reorder method, please contact Opal Logic on 1300 456 725 or email support@opallogic.com.au to discuss your requirements.
Standard reorder methods
|
Reorder method |
Where available |
Purpose |
|---|---|---|
|
Replenish to Minimum |
Purchase Order Entry Purchase Order Generation |
Calculates the suggested order quantity required to replenish stock back to the minimum stock level. |
|
Weighted and YTD Average |
Purchase Order Entry |
Calculates the suggested order quantity using sales history and required future stock coverage. |
|
Sales Forecast |
Purchase Order Generation |
Calculates the suggested order quantity using forecast or budget demand, delivery days, minimum stock requirements, stock on hand, and outstanding purchase orders. |
Replenish to Minimum
Replenish to Minimum is used when stock needs to be reordered based on the minimum stock quantity set for the item.
This method reviews the selected reorder month, current stock on hand, backorders, and outstanding purchase orders to calculate the suggested order quantity.
Formula
Suggested order quantity = (Backorders + Minimum SOH) - (SOH + Outstanding Purchase Orders)
Where order units apply, Jiwa rounds the suggested quantity up to the next valid order multiple.
Formula components
|
Component |
Description |
|---|---|
|
Backorders |
Outstanding customer demand that still needs to be supplied. |
|
Minimum SOH |
The minimum stock on hand quantity required for the selected reorder month. |
|
SOH |
Current stock on hand. |
|
Outstanding Purchase Orders |
Stock already on order from suppliers but not yet received. |
|
Order Units |
The order multiple used to round the suggested order quantity. |
Weighted and YTD Average
Weighted and YTD Average is used when suggested order quantities need to be calculated using sales history and future stock coverage requirements.
This method uses sales average information to calculate a minimum required quantity, compares this against available stock, and suggests an order quantity where available stock is below the minimum level.
Formula
MinQty = (Sales Avg1 + Sales Avg2) / 2
MinLevel = MinQty × MinMonthsCover
Available Stock = (SOH Qty + On Order Qty) - Backorder Qty
If Available Stock is less than MinLevel, the suggested order quantity is calculated as:
Suggested order quantity = (MinQty × MaxMonthCover) - Available Stock - BomParent
Where order units apply, Jiwa rounds the suggested quantity up to the next valid order multiple.
Formula components
|
Component |
Description |
|---|---|
|
Sales Avg1 |
Sales average used as part of the reorder calculation. |
|
Sales Avg2 |
Additional sales average used as part of the reorder calculation. |
|
MinQty |
The calculated minimum monthly quantity requirement. |
|
MinMonthsCover |
The minimum number of months of stock coverage required. |
|
MaxMonthCover |
The maximum number of months of stock coverage required. |
|
SOH Qty |
Current stock on hand quantity. |
|
On Order Qty |
Quantity already on outstanding purchase orders. |
|
Backorder Qty |
Quantity currently required for backorders. |
|
Available Stock |
Stock available after considering stock on hand, stock on order, and backorders. |
|
BomParent |
Quantity required for BOM parent items, where applicable. |
|
Order Units |
The order multiple used to round the suggested order quantity. |
Sales Forecast
Sales Forecast is used by Purchase Order Generation when suggested order quantities are based on forecast or budget demand.
This method accumulates forecast or budget units from the reorder month and future months required to cover the supplier delivery period.
Jiwa then adjusts the suggested quantity for stock already on purchase order, minimum stock requirements, and current stock on hand.
Formula
Suggested order quantity = Forecast Demand for the required coverage period - Outstanding Purchase Orders + Minimum SOH - SOH
Where order units apply, Jiwa rounds the suggested quantity up to the next valid order multiple.
Formula components
|
Component |
Description |
|---|---|
|
Forecast Demand |
Forecast or budget quantity for the reorder month and future months required to cover the supplier delivery period. |
|
Delivery Days |
The supplier delivery period used to determine how far ahead demand should be covered. |
|
Outstanding Purchase Orders |
Stock already on order from suppliers but not yet received. |
|
Minimum SOH |
The minimum stock on hand quantity required. |
|
SOH |
Current stock on hand. |
|
Order Units |
The order multiple used to round the suggested order quantity. |
Choosing the correct reorder method
|
Requirement |
Suggested reorder method |
|---|---|
|
Reorder stock back to minimum stock levels |
Replenish to Minimum |
|
Use sales history and stock coverage to calculate suggested order quantities |
Weighted and YTD Average |
|
Use forecast or budget demand to create purchase orders in bulk |
Sales Forecast |
|
Create purchase orders in bulk for multiple suppliers or inventory items |
Purchase Order Generation |
|
Create a single supplier purchase order using reorder calculations |
Purchase Order Entry |
Important notes
Reorder methods provide suggested purchase order quantities only. Users should still review the suggested quantities before committing or sending purchase orders to suppliers.
Suggested order quantities may be affected by stock on hand, outstanding purchase orders, backorders, minimum stock settings, order units, supplier settings, warehouse selection, and the reorder method being used.
Where order units are set, Jiwa will round the calculated quantity up to the next valid order multiple.