Meeting the demand of customers requires having enough inventory in stock. All industry experts understand this. Some experts, however, may need a better understanding of how this requirement is maintained in Microsoft Dynamics 365 Business Central.
Two of the most important fields, in terms of supply and demand, are Reorder Point and Reorder Quantity. These fields are two of the appropriately named “Reorder-Point Parameters” of Business Central. Emphasis is on the term “Parameters”!
Inventory Planning
In the “Planning” section of the Item Card, you’ll find Reorder Point and Reorder Quantity. These fields are available, since the chosen Reordering Policy is Fixed Reorder Qty.
To keep it simple, this blog article won’t supply the “dictionary definition” of these two fields.
Reorder Point is the minimum quantity to have in stock. A projected available inventory at or below the Reorder Point notifies you that more needs to be ordered.
Business Central must order at least the Reorder Quantity, to fulfill the Reorder Point’s quantity.
Illustrating Inventory Planning
This Sales Order for a quantity of 100 of Item 1900-S alerts you that the “available inventory for item 1900-S is lower than the entered quantity at this location.”
We’ll try to meet this demand, by using Business Central’s Requisition Worksheet to generate a Purchase Order:
Notice that the proposed Quantity is 100. This meets both the required Sales Order Quantity and Item Card’s Reorder Point.
Some may think that the Quantity called for in the Requisition Worksheet should be 120 – the sum of the Reorder Point of 100 and the Reorder Quantity of 20.
As mentioned earlier, however, Reorder Quantity suggests that at least 20 must be ordered to fulfill the Reorder Point. Think of this phrase -- “at least”.
By ordering 100, the quantity defined for Reorder Point is fulfilled! And, since 100 is greater than 20, Business Central has indeed accomplished the Item Card’s requirements.
A Second Line of Thinking
Let’s illustrate this, in a different way. What if the Quantity on the Sales Order were 150, instead of 100?
The Requisition Worksheet, then, proposes a Quantity of 150:
This is another good example of how to understand Business Central’s planning parameters:
a Sales Order calls for a Quantity of 150,
the Reorder Point of 100 is the minimum amount to keep in stock,
a projected available inventory at or below 100 calls for a Purchase Order, and
the Reorder Quantity explains that at least 20 needs to be ordered to fulfill the Reorder Point’s quantity.
The Worksheet’s Quantity of 150 produces a Purchase Order meeting the demand called for by the Sales Order, keeps projected available inventory from falling below 100, and is greater than the Reorder Quantity of 20.
Business Central has achieved all four of the above objectives!
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