When purchase orders are generated from past sales, entrée will review each item and determine whether or not to generate an order and then, if it should, how much product should be ordered.

 

 

Be sure that the Buyer's Stock Status Report has been run recently because entrée generates purchase orders according to the movement of items as reported on this report.

 

The sales volume used to calculate the required purchase quantity is taken from the 12 weeks worth of sales data that is calculated and stored by running the Buyer's Stock Status Report.

 

 

When an item is reviewed, entrée will calculates the supply time (how many weeks your current inventory will last), and compares it to the number of weeks of product that you want to keep before ordering more (APO weeks). The supply time is calculated using the formula:

 

Supply Time = (On Hand + On Order) / Usage

 

When the "case" item is sold by unit and the "piece" item is a "LB." item usage will be calculated properly when combining "case"- and "piece"-item sales. This feature was added in version 3.6.21.

 

 

entrée will only generate purchase orders for items where the supply time is less than APO weeks.

 

When the entrée system determines that an item should be ordered, the vendor's lead time (Auto P.O. Due Days), is added to the number of weeks worth of product that should be ordered (Purchase Multiple). This value is the multiplied to the usage for the period. Finally the current on hand quantity and the on order quantity is subtracted from the result to determine the quantity to order on the purchase order.

 

•Auto P.O. Due Days is defined on the Miscellaneous tab of Vendor File Maintenance.

•The Purchase Multiple is defined on the Vendor tab of Inventory File Maintenance.

 

 

For this example lets assume our vendor has a lead time of 10 days (Auto PO Due Days) and we want to order 2 weeks worth of product when the item is ordered (Purchase Multiple).

 

 

•The average usage is 56 cases per week.

•There is currently 124 cases on hand and none on order.

•Remember the Lead time is stored in days so it will be converted to a "weeks" value before it is added to the APO Weeks.

 

The formula to calculate the required quantity is:  

 

(((Auto PO Due Days / 7) + Purchase Multiple) * Avg. Usage) - On Hand - On Order

 

 

(((10 / 7) + 2.0) * 56) - 124 - 0 => ((1.43 + 2) * 56) - 124 => 192.08 - 124 = 68.08

 

Under these circumstances 68 cases of product would be placed on the purchase order.

 

 

 

 

•entrée will never order more than the lead time plus the purchase multiple weeks worth of inventory. Even if you specify an outrageously high value for "APO Weeks," that will not send the system into a buying frenzy (but specifying a large "Purchase Multiple" will).

 

•Because the order quantities are based on actual usage, the program will automatically track fluctuation in sales on an item-by-item basis. By giving you the ability to specify the number of weeks used in determining usage, you have control over how quickly the system responds to a change in sales (by raising or lowering the number of weeks used in averaging).  

 

•Because the vendor's Lead Time is factored into the calculation, the Purchase Multiple then becomes an exact specification of what your "Supply Time" will be when this order is received (all other things being equal).