Reorder Calculation

Greentree determines a historical analysis period using the Advanced Reorder details specified on the Defaults tab on the Inventory Module Control form. All transactions for each inventory item included in the process with sales history are accumulated for every historical period that is created.

Once it determines the history, Greentree Desktop forecasts future demand, which is what the suggested reorder quantities are based on. The sales forecasting process is based on extrapolating the calculated sales history data by using one of these two methods:

Linear Regression
Fitter Curve

You determine which method is used on the Defaults tab on the Module Control form, the Analysis Code Maintenance form, or the Defaults tab on the Inventory Item Maintenance form.

For each item included in the reorder run, the forecasting calculation involves:

Determining the average sales history by period.
Calculating the deviation from either the sales history or from the wave average.
Calculating the projected on-hand quantity at the end of each forecast period, and adjust it for any expected purchase order deliveries (based on expected delivery dates for current outstanding order lines).
Adding current backorder quantities to the specified minimum quantity (if applicable), to ensure that the suggested reorder quantity at least covers this.

The suggested reorder quantity for each item in the run is the difference between the forecasted inventory holding, taking into account predicted future period sales and expected purchase order deliveries, and the minimum quantity required to be held in inventory.

Suggested reorder quantities are adjusted using the EOQ factor assigned on the Supplier Maintenance form, if specified. Greentree Desktop rounds the quantities up to the EOQ multiple.