Configuration of Replenishment: To Calculate and Apply Replenishment Parameters

In the following implementation activity, you will set up automatic calculation of replenishment parameters for the reordering of a stock item in a particular warehouse based on historical sales data.

Attention: This activity is based on the U100 dataset. If you are using another dataset, or if any system settings have been changed in U100, these changes can affect the workflow of the activity and the results of the processing. To avoid any issues, restore the U100 dataset to its initial state.

Story

Suppose that you are Matt Parker, a purchasing manager of the SweetLife Fruits & Jams company, and you want the system to calculate replenishment parameters for reordering oranges based on the historical sales of the three previous weeks. Also, winter is high season for oranges, and SweetLife sells more oranges in the winter than it does in other seasons. You need to configure the system to calculate a demand forecast based on historical sales data and seasonality settings.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

  • The following features have been enabled on the Enable/Disable Features (CS100000) form:
    • Inventory Replenishment
    • Multiple Warehouses
  • The basic configuration of order management with inventory has been performed, as described in Order Management with Inventory.
  • On the Warehouses (IN204000) form, the WHOLESALE warehouse has been created.
  • On the Stock Items (IN202500) form, the ORANGES stock item has been created.
  • Also, the dataset includes sales orders on the Sales Orders (SO301000) form and purchase orders on the Purchase Orders (PO301000) form for the previous three weeks.

Process Overview

In this activity, you will do the following:

  1. On the Replenishment Seasonality (IN206600) form, create the HIGHSEASON replenishment seasonality.
  2. On the Stock Items (IN202500) form, specify the replenishment settings for the ORANGES stock item.
  3. On the Calculate Replenishment Parameters (IN508500) form, calculate the replenishment parameters for the ORANGES stock item in the WHOLESALE warehouse.
  4. On the Apply Replenishment Parameters (IN509500) form, apply the calculated parameters to the ORANGES stock item in the WHOLESALE warehouse.

System Preparation

Before you start setting up the calculation of replenishment parameters, you should do the following:

  1. Launch the MYOB Acumatica website, and sign in to a company with the U100 dataset preloaded. You should sign in as purchasing manager Matt Parker with the parker username and the 123 password.
  2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 1/30/2024. If a different date is displayed, click the Business Date menu button, and select 1/30/2024 on the calendar.
  3. On the Company and Branch Selection menu, in the top pane of the MYOB Acumatica screen, make sure the SweetLife Head Office and Wholesale Center branch is selected.

Step 1: Creating the Replenishment Seasonality

To create a seasonality for SweetLife's high-purchase season for citrus fruits, do the following:

  1. On the Replenishment Seasonality (IN206600) form, add a new record.
  2. In the Summary area, specify the following settings:
    • Seasonality ID: HIGHSEASON
    • Description: High season for citrus fruits
    • Calendar: MAIN
  3. On the table toolbar, click Add Row.
  4. In the added row, specify the following setting:
    • Active: Selected
    • Season Start Date: 11/1/2023
    • Season End Date: 2/28/2024
    • Factor: 3

      This factor shows the increase of sales of oranges in the high-purchase season, that is, three times increase in sales.

  5. On the form toolbar, click Save.

Step 2: Specifying Replenishment Settings for a Stock Item

To specify the settings that will be used to calculate replenishment parameters for oranges based on the moving average model of demand forecasting, do the following:

  1. On the Stock Items (IN202500) form, open the ORANGES item.
  2. On the Inventory Planning tab, in the only table row, modify the replenishment settings as follows:
    • Seasonality: HIGHSEASON
    • Demand Forecast Model: Moving Average
    • Forecast Period Type: Week
    • Periods to Analyze: 3
  3. In the Service Level (%) column, notice that 84 is specified. In MYOB Acumatica, 84% is considered the optimal service level because in general, it gives a company the ability to keep a balance between opportunity costs and operation costs for inventory management. The Safety Stock Suggested setting on the Apply Replenishment Parameters (IN509500) form will be calculated by using the service level. For details, see Configuration of Replenishment: Demand Forecast Model.
  4. On the form toolbar, click Save.

With these settings, during the calculation of the replenishment parameters for oranges, the system will analyze the three previous weeks of historical purchase and sales data.

Step 3: Calculating the Replenishment Parameters

To calculate replenishment parameters for oranges in the WHOLESALE warehouse, do the following:

  1. Open the Calculate Replenishment Parameters (IN508500) form.
  2. In the Selection area, specify the following settings:
    • Forecast Date: 1/30/2024
    • Action: Calculate
    • Warehouse: WHOLESALE
    • Seasonality: HIGHSEASON
  3. In the table, select the unlabeled check box in the row with the ORANGES item.
  4. On the form toolbar, click Process. The Processing dialog box opens, showing the progress and then the results. The system has calculated the replenishment parameters for oranges in the WHOLESALE warehouse based on the historical sales data of the three previous weeks.
  5. Close the Processing dialog box. Notice that the row with the ORANGES stock item is no longer displayed in the table.

Step 4: Applying Replenishment Parameters to the Stock Item

To apply the calculated replenishment parameters to the ORANGES stock item in the WHOLESALE warehouse and adjust these parameters, do the following:

  1. On the Apply Replenishment Parameters (IN509500) form, select the WHOLESALE warehouse. In the only table row, review the replenishment parameters that the system has calculated for the ORANGES item, which should be the following:
    • Safety Stock Suggested: 44.08
    • Reorder Point Suggested: 124.45
    • Max. Qty. Suggested: 124.45
    • Daily Demand Forecast: 23.33
    • Lead Time Average: 3.44

      This setting shows that on average, it takes 3.44 days to ship the item from the default vendor's location to the WHOLESALE warehouse.

    Attention: The values of replenishment parameters depend on the calculation date and the purchase and sales documents that have been entered into the system. (For details, see Configuration of Replenishment: Demand Forecast Model.) You may see different values if you select a different calculation date or your system has a different set of purchase and sales documents than those in the initial U100 dataset.
  2. In this row, select the check box in the unlabeled column.
  3. On the form toolbar, click Process. The Processing dialog box opens, showing the progress and then the results.
  4. Close the Processing dialog box. Notice that the row with the ORANGES stock item is no longer displayed in the table.
  5. Open the Item Warehouse Details (IN204500) form.
  6. In the Selection area, specify the following settings:
    • Inventory ID: ORANGES
    • Warehouse: WHOLESALE
  7. In the Replenishment Parameters section of the Inventory Planning tab, make sure that the system has inserted the values it calculated for the ORANGES item in the WHOLESALE warehouse, which should be the following:
    • Safety Stock: 44.08
    • Reorder Point: 124.45
    • Max. Qty. : 124.45
    Tip: The system sets the maximum stock quantity to the reorder point quantity. You can manually increase the maximum stock quantity if you need to optimize the quantity of items in stock while taking into account the time and expenses for delivery of stock items to your warehouses. For details, see Configuration of Replenishment: Demand Forecast Model.
  8. Suppose that you want to round the first two values to the nearest ten and increase the maximum stock quantity. Adjust the replenishment parameters as follows:
    • Safety Stock: 50
    • Reorder Point: 130
    • Max Qty.: 200
  9. On the form toolbar, click Save.

You have calculated, applied, and adjusted the replenishment parameters for the replenishment of oranges in the high season in the WHOLESALE warehouse.