Create suggested reorder settings per location to set supply levels that will show when creating purchase orders for parts. You can use this as a way to adjust the suggested quantities on orders.
How Reorder Points Are Calculated
Note: Your business location must have at least 6 months' of sales to calculate reorder point numbers.
Enter Reorder Numbers
- From any module in MotilityAnywhere, select the user icon in the upper right of the screen to open the menu.
- Choose the Settings option from the menu. This will open a screen where, depending on your security permissions, you may view or update company settings.
- Select the App Settings tab.
- Click the Parts & Service section from the subtabs to the left side of the screen.
- Locate and click to expand the Re-Order Settings section.
- In the upper left, you will choose the location for which you wish to set up the reorder settings.
- Enter your desired reorder point percentage, or enter the desired weekly supply for part sale numbers.
- Click the Set Default button to update your numbers.
- Select the Save button.
How Reorder Points Are Calculated
The suggested reorder looks at the sales from the last 6 months of all parts.
Per part, it takes the total number of sales for the last month (month01) * .7 + month02 * .2 + month03 * .1 + month04 * .07 + month05 * .02 + month06 * .01 and divides that number by 4.3 to figure the Average Weekly Sales (AWS) per part.
Then, based on the part’s AWS:
If the number is > 22 it sets the Mean Inventory Level (MIL) to (3 + (the average lead time in days / 7)) * AWS.
If the number is >= 23 and <=22 it sets the MIL to (2.5 + (the average lead time in days / 7)) * AWS
etc.
The part's temporary MIL is set to the higher of the calculated MIL or the parts Minimum. This is the highest level of inventory the program thinks this location should have.
The part's Reorder Point (ROP) is set to the temp MIL * .80 (the Re-Order Point %). This is the minimum level of inventory it has calculated. This number is calculated as a suggested minimum but never used.
The part's order quantity is then figured as the (MIL - (TOH - TOA) - TOO)/ packaging ratio. If that number is < 0 it is set to 0. The quantity of the parts already on an order list plus any that are waiting to be returned are also subtracted out of this.
It's capped to not go over the part's Max unless the Max is 0.
All parts with an order quantity >0 are added to the suggested order list.
Examples:
Example 1:
Part X1 has sales of 160, 201, 213, 244, 224, and 174 for the last six months, has 98 TOH, 20 TOO, 6 TOA, Min/Max of 20/140, PackRatio of 1 and Leadtime of 1 day.
AWS=(112+40+21.3+17.08+4.48+1.74)/4.3=45.72
That’s >22 so MIL=(3+ (1/7))*45.72=143.69
MIL=143.69 and the ROP of 114.95
(143.69 - (98-6) -20)/1=31
The Order Quantity should be 31 but because of the part's max it will order 28.
Example 2:
Part A51 has sales of 14, 10, 9, 0, 0, and 1 for the last six months, has 1 TOH, 0 TOO, 1 TOA, Min/Max of 0/0, PackRatio of 1 and Leadtime of 1 day.
AWS=2.97 if my calcs are correct
That’s >2.3 so MIL=7.56 and the ROP of 6.05
The Order Quantity will be 7
Example 3:
Part Z6 has sales of 14, 22, 24, 25, 29, and 30 for the last six months, has 7 TOH, 20 TOO, 0 TOA, Min/Max of 4/0, PackRatio of 1 and Leadtime of 4 days.
AWS=4.47 if my calcs are correct
That’s >2.3 so MIL=11.81 and the ROP of 9.45
The Order Quantity will be 0
Glossary of Terms
AWS - The Average Weekly Sales is calculated on the previous six months of part quantities sold.
Lead Time - The length of time that elapses between ordering and receiving a part.
MAX - The maximum number entered on the master inventory profile.
MIL - The Mean Inventory Level is calculated based on the AWS and Lead Time.
MIN - The minimum number entered on the master inventory profile.
PackRatio - The purchase packaging ratio entered on the master inventory profile.
ROP - The ReOrder Point is calculated based on MIL and the reorder point percentage entered in step 7 above.
TOA - The Total on Allocation is the number of parts reserved by being added to invoices for the location.
TOH - The Total on Hand is the number of parts on hand for the location. This is entered on the master inventory profile.
TOO - The Total on Order is the number of parts on purchase orders for the location.