| # Item - Ordering (tcibd2100s000) Order System Enterprise Planning only plans items of which the order system is Planned. To specify the order system: Start the Item - Ordering (tcibd2100s000) session. Click the Settings tab. Set the Order System field to Planned. Lot sizing A planned order’s order quantity is the quantity that is manufactured, bought, or otherwise supplied by that planned order. The value of the Order Method field determines which rules Enterprise Planning applies in the order quantity calculation. General lot-sizing parameters: Order Quantity Increment Minimum Order Quantity Maximum Order Quantity Parameters for specific order methods: Fixed Order Quantity Economic Order Quantity Maximum Inventory To avoid orders for unusual quantities (for example, 32,142 iron bolts), set the Order Quantity Increment field to round numbers, such as 10, 50, or 100. Enterprise Planning plans the order quantity to a multiple of the Order Quantity Increment field. To avoid orders for extremely small quantities (for example, 20 inch of metal wire), set the Minimum Order Quantity field to a reasonable value. Very large orders reduce the planning flexibility for your production and handling facilities. For example, a production order that keeps a work center occupied for three weeks, prevents the system from scheduling small rush orders in between. To prevent these situations, use the Maximum Order Quantity field. The Order Method field can have these values: Lot-for-Lot Fixed Order Quantity Economic Order Quantity Replenish to Maximum Inventory Lot-for-Lot The most simple order method is Lot-for-Lot. If the order method is Lot-for-Lot, Enterprise Planning calculates the order quantity as follows: First, sets the order quantity to the required quantity. Rounds the order quantity up to the next multiple of the Order Quantity Increment field. If the order quantity is less than the minimum order quantity, adjusts the order quantity accordingly. If the order quantity is greater than the maximum order quantity, generates multiple orders. Note If the maximum order quantity constraints the order quantity, the system optimizes the generated orders. Example Minimum order quantity = 30 Maximum order quantity = 50 Demand = 70 Two orders are created of 35 pieces. The system does not generate an order of 50 and another order of 30, because this would result in 10 pieces too much. Fixed order quantity If the order method is Fixed Order Quantity, Enterprise Planning always makes the order quantity equal to the fixed order quantity, as follows: If the demand is less than or equal to the fixed order quantity, Enterprise Planning generates an order and sets the order quantity equal to the fixed order quantity. If the demand is greater than the fixed order quantity, Enterprise Planning generates multiple orders. Economic order quantity The economic order quantity is the lot size that will give you the lowest total cost, considering order costs and inventory handling costs. To calculate the economic order quantity, click Calculate EOQ. If the order method is Economic Order Quantity (EOQ), Enterprise Planning sets the order quantities to at least the economic order quantity. Replenish to maximum inventory If the order method is Replenish to Maximum Inventory, Enterprise Planning generates orders if the projected inventory drops below the inventory plan or the safety stock. If this happens, the order quantity is made large enough to bring the inventory back to the maximum inventory level. You can set the maximum inventory level in the Maximum Inventory field. The Replenish to Maximum Inventory order method is particularly suitable if: The item has a relatively low cost price and low storage cost; in other words, you can keep a reserve quantity in storage without much cost. Demand for the item is difficult to predict or lead times are long. Example Order Method = Replenish to Maximum Inventory Maximum Inventory = 50 pieces Safety Stock = 0 Replenish to maximum inventory Stock at starting point is 0 At Requirement 1, you receive the first sales order (15 pcs). The projected inventory drops to a negative value (-15) Enterprise Planning generates an order for 65 pcs to bring the inventory back to 50 At Req. 4, the time-phased inventory value drops below the safety stock or below 0, to -1. Enterprise Planning raises the next order for 51 pcs, and brings the projected inventory back to 50 In previous LN versions, this order method was implemented for SIC (Statistical Inventory Control) items). The functionality is available for planned items as well. You can apply the SIC logic during the order generation run. |