Recommended WO PO Quantity

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Recommended WO PO Quantity

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RECOMMENDED Work Order PURCHASE ORDER QUANTITY

Differs from the recommended Purchase order quantity only by also reducing the quantity for any relevant stock work orders.

 

This is calculated in the following manner:

Recommended reorder level

Plus

Stock Requirements

Less

Total Stock on Hand

Less

Quantity Committed to Sales

Less

Quantity on Purchase Orders

Less

Quantity on Stock Work Orders

 

STOCK REQUIREMENTS

If the item is used in the manufacture of a stock item (i.e. it is in a BOM) and the stock work order is still pending (i.e. the work order has not been released, therefore the inventory items are still in stock)

 

And

 

The date required LESS the lead time to manufacture is <= today’s date

 

The item is considered to be a stock requirement.  Also any work order shortages are included in this figure.

 

STANDARD REORDER LEVEL

If the quantity of stock on hand is either at this level or below then an order should be placed

 

STANDARD REORDER QUANTITY

When the stock on hand reaches the standard re-order level then this is the standard quantity to order.

 

RECOMMENDED REORDER LEVEL

This is the recommend stock level at which to place an order.

 

There are three considerations in this calculation.

 

STOCK ITEMS

If the item is a stock item, then the total quantities sold, manufactured or transferred for the past six months are considered.

A weighting is applied to each month (as determined in a control record) and the total quantity accumulated in the following manner

 

If a lead time applies then the total quantity = qty sold / no of periods * Lead time/30

If there is no lead time then the total quantity = qty sold / no of periods

 

NON STOCK ITEMS - Not in a Bill of Materials

This item is not kept in stock, not in a BOM and will only be re-ordered when the stock level is Zero.

 

NON STOCK ITEMS - Used in a Bill of Materials

If the item is not a stock item and it is in a BOM then the total quantities sold, manufactured or transferred for the past six months are considered.

 

A weighting is applied to each month (as determined in a control record) and the total quantity accumulated in the following manner

 

If a lead time applies then the total quantity = qty sold / no of periods * Lead time/30

If there is no lead time then the total quantity = qty sold / no of periods

 

Finally if there is stock on hand, the total quantity is reduced by this figure.

 

QUANTITY ON PURCHASE ORDERS

If the items lead time + today’s date is prior to the delivery date

Or

The delivery date is less than or equal to today then the item is considered as on order and a viable stock quantity.  All other quantities are considered as Future orders.

 

If for any reason the quantity on order becomes negative, then the quantity on order will be treated as zero.

 

QUANTITY ON STOCK WORK ORDERS

If the required date less the manufacturing lead time is prior to today’s date then the balance of the work order is considered as a viable stock quantity.

 

If the release date + the manufacturing lead time is prior to today’s date then the balance of the work order is considered as a viable stock quantity.

 

All other quantities are considered as expected manufacture.