Updating the Maximum/Minimum stock quantities held against the stock record is an option which is normally run on a monthly basis. The option is controlled by a parameter within Stock Management-System Parameters or can be automated within Timed operations.
The option may also be run manually via the Report Generator in Stock Management and using the selection method to run report ID K05.
The system will recalculate the recommended stocking levels against the parts based on the following information:
Period Between Orders: This is taken from:
A) The Product Group file.
B) The Stock Management default held on the Parts default record. The system will only refer to this if the information is not available from the Product Group file, i.e. when the part carries an invalid Product Group.
Lead Time: The Lead time is taken from the stock record. If the stock record is set to zero, the information is taken from the Product Group file.
Note: If the Lead time on the Product Group is set to zero, or the Product Group is not valid, then the Stock Management default held on the Parts default record will be used.
Safety Coefficient: This is taken from the Product Group file and is dependent on Reorder Category. The values may be in the range of 0.00 to 9.99.
Note: If parts have a reorder category that is not present in the Product Group file with a safety coefficient then the system will not calculate a recommended Max/Min level. However, the system will still zero the Period Demand field and recalculate the Average Monthly Demand.
The following conditions are also taken into account.
Any part which has the field Stock balance item set to N will be ignored. See Description Tab of the Display Stock Record form.
Any part which has the field Non stock item checked (ticked) will be ignored. See Description Tab of the Display Stock Record form.
Purchase Factors: The Purchase Factor is the number of units of issue contained in a unit of purchase. See Demand Tab of the Display Stock Record form.
For example:
205 litres in a drum
25 metres in a roll
4 plugs in a pack
Unit Buy: This is how many issues are in the total minimum purchase. See Prices and Costs Tab of the Display Stock Record form.
For example, 205 litres in a minimum 1 drum purchase, etc.
Looking at a stock record for Antifreeze:
| Unit Issue | Litre | Stock Quantity | 80 Litres |
| Unit Buy | Drum | Minimum Stock | 70 Litres |
| Maximum Stock | 100 Litres | ||
| Unit Buy | 205 Litres | ||
| P/Factor | 205 Litres |
In this case, there is the stock of 80 and the max is set to 100, a purchase of 20 is required to top the stock back up to maximum.
Using the 'Unit Buy' figure, the system knows that it must order in multiples of 205.
Using the 'Purchase Factor' will prevent the system placing an order for 205 drums.
The Purchase Factor is used to correct the situation by dividing the quantity ordered by the Purchase Factor, i.e.:
| Quantity Ordered = 205 Litres | |
| = 1 Drum | |
| Purchase Factor = 205 Litres |
The purchase quantity will show on the screen as 205, but will print on the Supplier's order as 1 Drum. The price is the Unit price * the Purchase Factor. Thus the price of the ordered item will be the price per Drum.
When the stock is received and processed through Purchase Control, 205 Litres will be added to the stock quantity.
The minimum and maximum calculations are as follows.
Minimum Stock Calculation:
a) a = 1 + 0.3 / log(New AMD+2) (AMD = Average Monthly Demand)
b) b = Safety Coefficient + 1
c) c = (New AMD / 30) * Lead Time
Minimum Stock = the higher of 1 or the integer of (a*b*c)+1
Maximum Stock Calculation:
Max Stk = New Min + ((New AMD / 30) * Period Between Orders)
