Stock formula

August 30, 2015 in Inventory Control,System Manager

Content of this Post

Step 1 - Stock Formula Details

Purpose

This routine is used to maintain the stock formula setting in the Inventory system. There are 5 stock formula options available. The currently selected formula is highlighted. The system default formula is option 5.

The option selected determines how the system will calculate the Available Quantity when required. Depending on the formula selected the Committed and/or Back Order quantities can be taken into account when calculating the available stock quantity. The sequence of the items in the formula is also important as this can give preference to Back Orders over new Commitments or vice versa as required.

The stock formula is used in the calculation of ‘Available Stock Quantity’ in the Inventory system and Order Processing system. The Replenishment system, Sales Order Entry and Picking functions all use the Stock Formula and the Available Stock Quantity to make decisions with. It is also used in Inventory Reports and Displays functions throughout the system.

For further explanation a definition of what each line in the formula reflects is below:

On Hand – the systems ‘perpetual’ stock figure which should in theory match the actual amount of stock held in your physical warehouse at any ‘equivalent’ point in time

In Store – the total quantity of purchased items that are on Received Shipments i.e. Shipments that have not yet been ‘Finalised’

On Pick – the total quantity of stock being picked – i.e. the sum of all Sales and Transfer Order picking dockets that have been printing from the system and are not yet finalised/invoiced

Reserved – the total quantity of Outstanding Sales Orders & Transfer Orders for this product where the ‘Reserved’ check-box has been ‘ticked’ on the item during Order Entry. This is excluding ‘On Pick’ orders

Back Ordered – the total quantity of Sales and Transfer Back Orders held in the system. Back Orders being the ordered quantity that you have been unable to fill based on a lack of  ‘Available’ quantity, or that have been manually put to Back Order during picking/despatch/invoice processing

Committed –  the total quantity of Outstanding Sales Orders, Transfer Orders and Manufacturing Work Orders for this product, excluding ‘On Pick’ and ‘Reserved’ orders

Available – the total quantity of stock available to pick/despatch based on the selected formula and the ‘quantity’ in the classifications used for that formula i.e. a sub-total of everything above it

Un-Committed – the total quantity of stock that has not got a current/outstanding order against it. What is left to sell excluding existing commitments i.e. a sub-total of everything above it excluding “Available” which is a sub-total itself

Forward Order – the total quantity of Sales Orders, Transfer Orders and Manufacturing Work Orders for this product that have been been ordered in advance. These orders are far enough in the future to not be included in the calculations above but once their required date is close enough they will automatically move to one of the classifications above

In Transit – the total quantity of orders on their way into inventory for this item. These orders being shipped/in-transit Purchase Orders i.e. Shipments not yet received PLUS Stock Transfers that have left their source’ location but have not been received into the ‘destination’ location

On-Order – the total quantity of incoming Stock Transfer Orders and Manufacturing Work Orders for this product

Nett – the quantity of this inventory item left it every “pending” transaction for this product occurred i.e. a sum of all the classifications above excluding Available & Un-Committed as they are just sub-totals

Data Input

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Step 1 – Stock Formula Details

Select the stock formula that you require the system to use.
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