About the Low-Stock Wholesaler Report — Min/Max
The Low-Stock Wholesaler Report — Min/Max shows you what items are at or below your minimum and what you need to order to bring the stock level back to the maximum. The suggested order amount is based on three or 17 months' usage. When you run the Low-Stock Report, you can create a low-stock file, which you can use to create purchase orders automatically. You can also use the low-stock file when posting stock transfers. The Low-Stock Report can calculate the suggested order quantity in two ways: using the sales history of each item and the projected number of weeks between purchases, or using minimum and maximum stock levels.
The formula that calculates the suggested order quantity based on sales history uses sales for the last three months. Month-to-date sales are not used. Since this formula uses extended history, it is accurate only for items in stock classes with an extended history. You specify which stock classes have extended histories in the Class Range To Build History From field in the (LE1) Inventory Parameters screen.
The formula gives double weight to the most recent month and takes into account quantities on-order, on-hand, and backordered. You specify the number of weeks between purchases, which are called cycle weeks.
The number of weeks you specify relates to the number of times your inventory turns over in a year. For example, ten-week cycles give you five turns a year, and seven-week cycles give you seven turns a year. Varying the number of cycle weeks when running this report can help you see whether to increase or decrease inventory quantities.
The following formula is used to calculate the suggested order quantity:
([ (M1 x 2) + M2 + M3 ] x CW ) - ( OO + OH) + BO = Order Quantity
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M1 |
Last month |
M2 |
Month before last |
M3 |
Two months before last |
CW |
Cycle weeks |
OH |
On-hand |
OO |
On-order |
17 |
Average number of weeks in four months |
BO |
Backordered |
This formula produces two projections. The Need column shows the projected total sales for an item over the number of weeks in the cycle. The Order column shows the suggested order quantity.
Note: An asterisk (*) next to the suggested order quantity means the amount is based on the Min and Max boxes. No asterisk means the quantity is based on the cycle weeks formula.
This report is sorted by item number and company name. It contains the following information:
Inventory Department
Item Number
Company
Item Description
Unit of Measure
Replacement Cost
Last Year's SAles
Year-to-Date Sales
Minimum Quantity
Maximum Quantity
Hits
Amount Needed Based on Maximum Amount
Quantity on Order
Quantity on Hand
Quantity Backordered
Suggested Order Amount
Note: The cost and buy unit amounts on this report come from the I-WHL file, even if you round up to the manufacturer buy unit. To print cost and buy units for the manufacturer, ECI recommends you catalog the selector M-Lows and use this report to print the manufacturer information.
See also:
About the Low-Stock Wholesaler Report — Cycle