Purchase Control - Flipbook - Page 32
4. Maximum / Minimum Calculation
Introduction
Updating the Maximum/Minimum stock quantities held against the stock record is an option which is normally run
on a monthly basis.
The system will recalculate the recommended stocking levels against the parts, based on the following
information:
Field
Description
Period Between
Orders
This is taken from:
a) The Product Group file.
b) The Stock Management Default.
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 that if the Lead time on the Product Group is set to zero, or the
Product Group is not valid, then the Stock Management Default 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.
Minimum Stock
Calculation
a = 1 + 0.3 / log(New AMD+2)
(AMD = Average Monthly Demand)
b = Safety Coefficient + 1
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)
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.
If parts are set to Stock Balance 'N' they will be ignored.
If parts are set to Non Stock Item 'Y' they will be ignored.
Key Information – Maximum / Minimum calculation
30/07/2008
Page 32 of 126
