IC120 - EOQ and Reorder Calculation
Run this program to calculate the reorder point (ROP) quantity and/or the
economic order quantity (EOQ). The ROP determines when to reorder and the EOQ
determines how much to reorder.
To update the ROP, assign items to the variable (V) Reorder Point Code defined
in IC12.1 (Item Location) in the Reorder tab. To update the EOQ, assign items
to the economic (E) reorder quantity code in IC12.1 and define the company's
overall carrying cost percentage and ordering cost. You can run this report to
calculate reorder quantities for all items regardless of the reorder point
code and reorder quantity code.
The ROP calculation formula is:
[(annual usage x leadtime days) divided by 365] plus the safety stock
quantity.
The EOQ calculation formula is the square root of [(2 x annual usage x
ordering cost) divided by (carrying cost percentage x unit cost)].
The EOQ and ROP calculations can be based on transaction history or a
specified forecast period defined in IC19.1 (Forecasts) or both. If
calculated, you have the option to update the EOQ and ROP values to Item
Location records defined in the IC12.1 (Item Location) Reorder tab.
This form also provides options for you to update these values to the Item
Location record and update the reorder quantity with the EOQ value. Otherwise,
you can edit this report and manually enter these values after you made
adjustments. If the ROP is updated, you can calculate when to reorder based on
this value in IC140 (Vendor Reorder Advice) or IC225 (Inventory Reorder
Advice).
You can process items in this form by location, report group, and/or inventory
class. In addition, you can process only those item records with an old value
versus a new value difference greater than a specified percentage. If the
reorder quantity is specified for update, you can choose to round up the
reorder quantity to the nearest order multiple. For example, if the reorder
quantity is 49 and the order multiple is 12, the program rounds the reorder
quantity to 60.
Updated Files
CKPOINT - Used in back out or restart circumstances.
ITEMLOC - Reorder point and EOQ are updated if the update option is
selected.
Referenced Files
GLCODES - Used in a General Ledger common routine.
ICBIN - Used to access valid bin record.
ICCOMPANY - Used to validate the existence of the company number.
ICFORECAST - Used to calculate the annual forecast.
ICHISTORY - Used to calculate the annual forecast.
ICLOCATION - Used to print the location description.
ICRECEIPTS - Used to access costing records.
ICRPTGRP - Used to validate the report group.
ITEMMAST - Used to print the item description.
MAJORCL - Used to validate the major class.
MINORCL - Used to validate the major and minor class.
|
