DRP - Reorder Quantity Method FAQ

Question: What are the different reorder quantity methods used by DRP?

Answer: This is the current list. New standard (and custom) reorder quantity methods will be developed to handle the needs of specific situations.

Note The parameter names must be entered exactly as listed in order for the calculations to work properly. These same parameter names can be used for different reorder quantity methods.

Reorder Quantity Method / Program Name	Parameter	Type	Default Value	Description
EOQ (methrqeoq.p)	This reorder quantity method calculates the most economic order quantity (compares the cost of ordering with the cost of carrying inventory). This method is typically used for low cost items. The Economic Order Quantity mathematical equation is: EOQ = square root of [(Constant * Cost of Ordering * Monthly Forecast)/ Monthly Carrying% * Product Cost)] In this equation, the monthly forecast is the forecast for the next period (not the current period). NOTE The EOQ is overridden by 0 if there is no projected deficit for a period.
	BOM Planned Recpt Bucket	Character	Month	This can also be Week or Day. This determines the time bucket displayed on the DRP Schedule Management tab in Product DRP Management.
	Constant	Integer	2	This is a constant in the equation.
	Desired On Hand Calculation	Character	Standard	If this parameter is changed to Zero, desired on-hand values are set to 0. This is intended for use with drop-ship products for which you do not want product stored in inventory.
	Ending On-Hand No Releases	Logical	NO	If this parameter is changed to YES, an Ending Projected On-Hand(without releases) row is displayed on the DRP Schedule Management tab in Product DRP Management. The row is calculated as follows: Ending Projected On-Hand (without releases) from the prior time bucket + Total Expected Demand + Actual Planned Receipt For the Past Due time bucket it is calculated as follows: Beginning Projected On-Hand + Total Expected Demand + Actual Planned Receipt You can also optionally include quantities from shipments, purchase orders, work orders, transfers, unordered purchase orders, and blanket purchase orders.
	Future Supply Buckets in APR	Integer	0	Enter the number of future time buckets for which to include future purchase orders when calculating suggested and actual planned receipts. Example If you enter 1, the expected supply for the next future time bucket is included with the current time bucket's supply for the suggested and actual planned receipts calculation.
	Include Blanket P/O	Logical	NO	If this parameter is changed to YES, include the Unreleased Blanket PO’s quantity in the calculation of the Ending Projected On-Hand(without releases) row.
	Include Containers not on Shipments	Logical	YES	If this parameter is set to YES, quantities in containers that are not assigned to a shipment are included in the Shipments in Transit quantity and the delivery date of the container is used to calculate the time bucket. If this parameter is set to NO, quantities in containers that are not assigned to a shipment are included in the Purchase Orders and Work Orders quantity and the delivery date of the purchase order is used to calculate the time bucket.
	Include Drop Ship S/O P/O	Logical	NO	If this parameter is changed to YES, include drop-ship sales orders and purchase orders in DRP calculations.
	Include P/O W/O	Logical	NO	If this parameter is changed to YES, include the Purchase Orders and Work Orders quantity in the calculation of the Ending Projected On-Hand(without releases) row.
	Include Reservations	Logical	NO	If this parameter is changed to YES, an Inventory Reservations row is displayed on the DRP Schedule Management tab in Product DRP Management, and reserve now inventory reservations are included in past due demand calculations.
	Include Shipments	Logical	NO	If this parameter is changed to YES, include the Shipments in Transit quantity in the calculation of the Ending Projected On-Hand(without releases) row.
	Include Transfers	Logical	NO	If this parameter is changed to YES, include the Transfers From Other Locations quantity in the calculation of the Ending Projected On-Hand(without releases) row.
	Include Unordered P/O	Logical	NO	If this parameter is changed to YES, include the Unordered Purchase Orders quantity in the calculation of the Ending Projected On-Hand(without releases) row.
	K - Monthly Carrying %	Decimal	1.5	This is the monthly cost of carrying products in inventory, including cost of capital, material handling, obsolescence, shrinkage, and other incremental warehousing costs.
	Maximum Months Supply	Decimal	12	If the EOQ recommends a quantity in excess of this, the maximum will override.
	No APR Within a Lead Time	Logical	NO	If this parameter is changed to YES, the software does not create actual planned receipts within lead time. Example This parameter is set to YES. The normal lead time for a product is 90 days. If today is 1/1/2020, then the earliest that it could be received would be 4/1/2020. So, actual planned receipts are not created for the periods of 1/2020, 2/2020, and 3/2020. You can manually override the actual planned receipts for any of those periods if you have a means of accelerating delivery (air freight vs. ocean freight, etc.) For more information, see DRP - Lead Time Calculation FAQ.
	No SPR Within a Lead Time	Logical	NO	If this parameter is changed to YES, the software does not create suggested planned receipts within lead time. Example This parameter is set to YES. The normal lead time for a product is 90 days. If today is 1/1/2020, then the earliest that it could be received would be 4/1/2020. So, suggested planned receipts are not created for the periods of 1/2020, 2/2020, and 3/2020.
	Not Avail Inventory	Logical	NO	If this parameter is changed to YES, products stored in not available bins are included for the calculation of DRP beginning on-hand inventory.
	Periods Supply	Logical	NO	If this parameter is changed to YES, the following occurs: A Months Supply, Weeks Supply, or Days Supply row is displayed on the DRP Schedule Management tab in Product DRP Management. This row displays the number of future periods that can be fulfilled by the ending projected on-hand inventory. The period for this row is determined by the BOM Planned Recpt Bucket parameter. The number of future periods that can be fulfilled by the ending projected on-hand inventory displays in the Periods Supply row on the Planned Receipts tab in Summary DRP Management. The Periods Supply row only displays if the Periods Supply check box is selected on the Display tab in Summary DRP Management.
	PO Delivery Day Offset From	Character	Start Date	This parameter determines how the delivery date is calculated for purchase orders generated from DRP. The value can only be one of the following: Start Date - The delivery date is calculated as the expected date plus the number of days entered for the PO Delivery Days Offset parameter. The expected date is typically the first date of the period. End Date - The delivery date is calculated as the end date of the period minus the number of days entered for the PO Delivery Days Offset parameter. Note The delivery date calculated based on this parameter and the PO Delivery Days Offset parameter may be overridden to accommodate for product lead time. The purchase order required date is also set equal to the delivery date.
	PO Delivery Days Offset	Integer	0	Enter the number of days before the end of a period or after the beginning of a period to use for purchase order deliver date calculations. The software uses this number of days in conjunction with the PO Delivery Day Offset From parameter to calculate delivery dates. Example You enter 2 for this parameter and End Date for the PO Delivery Day Offset From parameter. If a purchase order is created via DRP for a period, the delivery date for the order is calculated as two days before the end of the period.
	R - Cost of Ordering	Decimal	2	This is the cost of the replenishment cycle per item per purchase order. This includes purchasing personnel, a portion of accounts payable personnel, and a portion of receiving personnel related to administrative functions of receiving an order.
	Unreleased Blanket PO in Supply	Logical	NO	If this parameter is changed to YES, include the Unreleased Blanket PO quantity in the calculation of the Total Expected Supply row in Product DRP Management and the Expected Supply row in Summary DRP Management.

Reorder Quantity Method / Program Name	Parameter	Type	Default Value	Description
Product Class (methsspc.p)	This reorder quantity method calculates reorder quantities based on DRP product classes for each product/location and a specified number of periods.
	Class 1-15	Character	Month	These are the DRP product classes. For information on creating DRP product classes, see DRP Product Class Maintenance.
	Class 1-15 # of Periods	Integer	1	These are the number of periods used to calculate demand to order for each specified DRP product class. Each value is in weeks or months, depending on the time buckets used for schedule management

Example Product A in location B is assigned to DRP product class C. The product/location is set up to use a buying method with the Product Class reorder quantity method. The reorder quantity method is set up to use 3 periods for calculating reorder quantity of DRP product class C. If the current month is June, and forecasted demands for July, August, and September are 75, 100, and 125, then the Desired On Hand quantity is calculated as 300 + safety stock quantity.

Note If the forecast is monthly and the schedule is weekly, the weekly allocation of monthly forecast is based on the unconsumed monthly forecast (not the net monthly sales). For example, if monthly forecast for June is 120 units and June has 4 weeks, the weekly forecast allocation is 30 units. If 80 units were sold in the first week of June, 40 units are left for the remaining weeks. However, for calculating the reorder quantity, 30 units of forecast are used for the second, third, and fourth weeks of June.