Acctivate uses a complex formula to determine the Suggested / Recommended Reorder Quantity per warehouse for each product.
This Quantity is visible on the Reorders tab of Business Alerts. The Suggested Qty is also the default PO Qty when using the Reorder function.
The Inventory Reorder Report (InvReorder.rpt) also contains the Recommended Reorder Quantity. The Net Available formula field is also calculated and visible in this report.
These quantities are not stored in the Acctivate database. Instead, they are calculated according to the following formula.
1. The Net Available quantity is first computed for each warehouse:
- Net Available = On Hand – Reserved – Sales Orders – Assemblies + Vendor POs»
Net Available = On Hand Quantity
– Reserved Quantity for the Warehouse (i.e., Safety Stock)
– Total Scheduled and Backorder Quantity from Customer Sales Orders
– Total Component Quantity from unposted Inventory Assemblies
+ Total Outstanding Quantity (not received yet) from Vendor Purchase Orders
2. The Net Available quantity is then compared to the Minimum Stocking Quantity (Min Stk Qty or Reorder Point) for the Warehouse. The item is not recommended for reorder if the Net Available Quantity is greater than the Minimum Stocking Quantity. Otherwise, we continue to the next step.
- If Net Available Quantity > Minimum Stocking Quantity Then
Suggested Reorder Quantity = 0
3. The Suggested Reorder Quantity will restore inventory to the Maximum Stocking Quantity (Max Stk Qty or Stocking Level) when you’ve set both the Min Stk Qty and Max Stk Qty. The Max Stk Qty is required when Min Stk Qty is set. If you don’t have a specific Max Stk Qty, enter the Min Stk Qty + 1 in the field.
- Suggested Reorder Quantity = Maximum Stocking Quantity – Net Available
4. Finally, we check to see if there’s a Minimum Reorder Quantity (Min Ord Qty). We will use that quantity if it is higher than the Computed Reorder Quantity.
- If Suggested Reorder Quantity < Minimum Reorder Quantity Then
Suggested Reorder Quantity = Minimum Reorder Quantity