This pane displays the results of the processing function you selected once processing is complete (unless you selected the option to close the application from the After processing completed section).

The Level column on the report indicates whether the output from the calculation is information, a warning or an error. Information and Warnings mean that the calculation has run successfully, but some phases were possibly omitted. An Error means that the MRP Calculation could not complete the run.

The following quantity fields are defined in the MRP table/file:

When you run the calculation, a pegging record is written to the pegging file for each demand or supply quantity added to the requirements file.

Pegging for sequential co-products is based on the operation completion date. Pegging for concurrent co-products is the job delivery date. Negative allocations are due at the end of the operation to which they are attached.

The calculation of the total number of days required to complete all operations (i.e. queue time, elapsed time, start time, complete time and move time) is affected by your selection at the option: Operation to end earlier than prior (Work in Progress Setup).

Stock on hand for expired lots can be excluded or included when determining material requirements by setting the Make provision for lot expiry in requirements calculation option as required (Requirements Planning Setup).

For example:

A made-in stock item is lot traceable and has a lot with a quantity of 2.

The lot expiry date is before today's date.

You have a forecast for 10 of this stock item.

You run the Requirements calculation as of today's date.

When the option: Make provision for lot expiry in requirements calculation is enabled, the Requirements calculation shows a demand of 10 and a suggested job for 10. The quantity of 2 in the expired lot is seen as unavailable.

When the option Make provision for lot expiry in requirements calculation is disabled, the Requirements calculation shows a demand of 10 and a suggested job for 8. The fact that the quantity of 2 is in an expired lot is ignored and treated as available.

	Quantities in lots on hold are included in the requirements calculation.

Processing occurs as follows when the Make provision for lot expiry in requirements calculation and the Include in requirements calculation - Stock on hand options (Requirements Planning Setup) are enabled:

The demand and supply for non-current specific rev/rels, including the quantity available, will be accumulated before processing those existing and suggested job allocations which use deplete oldest.

This is so that:

If the option to make provision for lot expiry is enabled, then any lots which will expire before the demand date will be applied before those job allocations using deplete oldest. If any job allocations with demand have a demand date of cancel, then these will be applied as demand records to the current rev/rel.

If the option to deplete from multiple rev/rels is not enabled, then the remaining supply quantity against a rev/rel must be equal to or exceed the job allocation demand quantity.

If the item is lot traceable and you can only select a single lot then the remaining supply quantity against a rev/rel must be equal to or exceed the job allocation demand quantity.

When processing current rev/rels any remaining deplete oldest demand will be applied and the current rev/rel will be netted off as per normal.

We recommend you enable the Suppress MRP ordering option (Requirements Planning Setup) so that run out can be performed without any new orders being raised. If the Suppress MRP ordering option (Requirements Planning Setup) is not enabled: and the order policies which check warehouse/IO min/max levels are used then these will be processed as per normal and you may have unnecessary supply raised for non-current rev/rels. If this does happen then you will have a remaining quantity which will not be used up by deplete oldest demand. and an item's order policy is also not to suppress ordering and the option to schedule supply according to demand is also not switched on then you may have a case where suggestions are raised unnecessarily for non-current rev/rels. If this does happen then you will have a remaining quantity which will not be used up by deplete oldest demand.

The following files are cleared during this phase:

A control record is inserted into the Requirements file. This control record stores the options selected, as well as the operating system date and time that the calculation started.

This phase is performed if both the Inventory Control and Bill of Materials modules are installed. If there have been no changes to the structure master file since the last low level code calculation (and structure on/off dates are not in use) then this phase runs very quickly.

Each structure in the Bill of Materials system is processed to calculate the low level codes. This information is used during the netting-off phase to ensure that top level items are processed before lower items. This is necessary because the demand caused by a top level item on a lower level item needs to be exploded through the levels to calculate the quantity required at the lower level item.

Bill of Material structure on/off dates are ignored. A check is made to ensure that no component is attached below level 15, and that a parent part is not attached to its own structure as a component. If either of the above occurs, then this is printed on the Requirements calculation error log and the program aborts. Archived BOM structures are ignored when the option: Suppress MRP ordering is enabled (Requirements Planning Setup). This does not apply to Phantom parts as these are always included, irrespective of whether they are archived.

For a notional part, the low level code is one lower than the lowest co- product attached to it.

For example:

You have a Notional part, with co-products A, B and C attached to it.

The low level for co-product A is 0, for co-product B is 3 and for co-product C is 2. The low level code for the notional part is therefore 4 (one lower than co-product B).

It is important to note that the number of levels remains at 15 and that includes notional parts.

The low level code is stored on the Inventory master file/table and is updated when you run the BOM Structure validation program and select to Validate structure levels (Structure Validation).

This phase is performed if you enable the option: Build schedule at the Include in requirements calculation field (Requirements Planning Setup).

Only stock codes defined as MPS items are included. The demand profile for these items will not show an opening stock, nor use safety stocks or any buying rule other than buying rule A (lot-for-lot). These parameters are assumed to have been taken into account by the planner in constructing the build schedule. Multiple build schedules for a day will be accumulated and a single suggestion for the entire quantity will be made.

Each build schedule record either creates a new requirements record or updates an existing one, depending on whether a requirement record already exists for the same stock code/warehouse/date combination.

Build schedules are inserted as a demand into the requirements file.

This phase is performed if you enable the option: Forecasts at the Include in requirements calculation field (Requirements Planning Setup).

Each active forecast record either creates a new requirements record or updates an existing one, depending on whether a requirement record already exists for the same stock code/warehouse/date combination.

Forecasts are inserted as a demand into the requirements file. If a forecast is for a planning item, then the components of the stock code are inserted as demand records.

If the option: Build schedule is selected at the Include in requirements calculation field (Requirements Planning Setup) then only non-MPS items are processed during this phase. The MPS items would have been processed in the Processing build schedule file phase.

When processing a planning bill item, the warehouse defined against the BOM components is used and not the warehouse against the planning bill's forecast that raised the demand. If the component's warehouse is not defined then the warehouse defined against the planning bill's forecast is used. If the warehouse defined on the BOM structure record is not included in the Requirements Calculation then the component entry is ignored.

This phase is performed if you enable the option: Sales orders at the Include in requirements calculation field (Requirements Planning Setup) and the Sales Order module is installed.

Each sales order in a status of 1, 2, 3, 4 or 8 is processed.

Sales orders and SCTs excluded from the MRP calculation in the Sales Order Entry, Sales Order Entry Express and SO Supply Chain Transfer Creation programs are ignored. When orders are excluded at header level, their detail lines are excluded, regardless of whether they are included at line level.

Sources of supply (e.g. jobs, purchase orders, etc) attached to excluded Sales orders are excluded from the calculation as a source of supply. However, if the options: Schedule jobs and purchase orders according to demand and Schedule specific supply are both disabled, then supplies remain untouched when the sales order is excluded. When a sales order (or sales order line) is excluded from the MRP calculation, it is no longer seen as a source of demand and if a shortage exists, no suggested purchase orders, requisitions or jobs are raised for the item(s) on that specific sales order/line and any supplying jobs are not suggested to be cancelled as they are ignored.

When a sales order is linked to a purchase order, the MRP calculation only applies to the quantity outstanding against the purchase order, so when the purchase order has been received fully it is ignored by MRP from a supply perspective. For a stocked item, the quantity on hand against the warehouse will be increased by the purchase order receipt quantity and if the quantity is allocated to a sales order and in ship, then the quantity on hand against the warehouse will still reflect the purchase order receipt quantity up until the sales order is complete (thus MRP will still take account of the ship quantity against the sales order, otherwise it may be perceived that there is excess stock).

For a non-stocked code, a sales order line linked to a purchase order which has been fully received (or is set to complete) is ignored by MRP from a demand perspective and the sales order Include in MRP flag is automatically set to ignore the sales order line. If the purchase order receipt is subsequently reversed, then the Include in MRP option in sales orders must be set manually by the operator if the sales order line must be re-included in MRP.

The demand quantity for each merchandise line is calculated by adding the ship and back order quantity and converting it to the stocking unit of measure. The order ship date (line ship date for scheduled orders) is used to determine which requirement record must be inserted or updated. Sales orders are inserted as a demand into the requirements file.

If the option: Build schedule is selected at the Include in requirements calculation field (Requirements Planning Setup) then only non-MPS items are processed during this phase as the MPS items would have been processed in the earlier phase.

If the option Reserve stock for allocations is enabled (Work in Progress Setup) and you exclude both confirmed jobs and sales orders, but enable the option: Reduce quantity on hand by allocated (Requirements Planning Setup) then the warehouse quantity available is reduced by both the WIP reserved quantity and sales order quantity against included warehouses for items.

If the option Reserve stock for allocations is enabled (Work in Progress Setup) and you include confirmed jobs and exclude sales orders, but enable the option: Reduce quantity on hand by allocated (Requirements Planning Setup) then the warehouse quantity available is reduced by the sales order quantity against included warehouses for items.

If you are excluding Sales Orders (Requirements Planning Setup) but you enabled the option: Reduce quantity on hand by allocated (Requirements Planning Setup) then the on hand quantity is reduced by the quantity allocated to sales orders. The Available quantity in MRP is also affected by Sales Orders.

This phase is performed if you enable either of the options: Confirmed jobs or Unconfirmed jobs at the Include in requirements calculation field (Requirements Planning Setup) and the Work in progress module is installed.

Each incomplete job is processed. In addition, the options defining whether confirmed jobs, unconfirmed jobs, or jobs on hold must be included, is checked against the job status.

A job is ignored by the MRP calculation if it is linked to a sales order which is excluded form the MRP calculation.

Jobs are excluded when the quantity manufactured equals or exceeds the quantity to make. If a job has made more than originally anticipated (quantity manufactured is greater than quantity to make) but the material allocations are outstanding (they may be issued at the end of the job) then MRP assumes that the materials are no longer required and removes them from the MRP pegging.

The Requirements Planning calculation takes cognizance of subcontract operations attached to both live and suggested jobs and jobs created from quotations and treats them as material allocations insofar as raising demand within the requirements calculation and therefore raising suggested supplies for the non-stocked item.

When a subcontract operation contains both offsite time and lead time, then the result of the calculation includes both these elements when a suggested order date is proposed. The calculation subtracts the offsite days from the demand date (which is the time consumed by the subcontractor to perform the task) and then subtracts the lead time (which is the time required by the subcontractor from the time you notify him of your need until he performs the task). The result is the suggested purchase order date.

If you are reserving stock for allocations (Work in Progress Setup) and you include both confirmed jobs and sales orders, then the warehouse quantity available includes both the WIP reserved quantity and sales order quantity against included warehouses for items.

If you are reserving stock for allocations (Work in Progress Setup) and you exclude confirmed jobs, then the warehouse quantity available is reduced by the WIP reserved quantity against included warehouses for items.

Negative material allocations that exist against a job are treated as a supply by MRP. Unlike other supplies, however, these cannot be re-scheduled according to demand.

The Requirements Calculation processes floorstock items as follows:

A record is inserted into the temporary supply file. The jobs are loaded during the netting-off phase.

	Excluding Jobs from the MRP calculation (Requirements Planning Setup) does not prevent the Requirements calculation from raising suggested Jobs. Selecting the options in Requirements Planning Setup merely excludes existing Job entries from supply and demand.

MRP only deals with the default offer. It does not try and negotiate multiple offers.

The following rules apply:

Examples:

To illustrate the relationship between the MRP option Include quotations with probability greater than and the probability factor against the quote, the following scenarios are provided:

This phase is performed if you enabled the option: Purchase orders at the Include in requirements calculation field in the Requirements Planning Setup program and the Purchase Order module is installed. Each purchase order in a status of 0, 1, or 4 is processed.

The supply quantity for each incomplete stocked or non-stocked line is calculated by subtracting the quantity received from the original order quantity and converting it to the stocking unit of measure.

Excluding purchase orders from the MRP calculation in the Requirements Planning Setup, Purchase Order Entry or PO Creation programs merely excludes the stocked and non-stocked items on the purchase orders/lines from being seen as a source of supply. It does not prevent the Requirements calculation from raising suggested purchase orders. For example, if a purchase order for a job allocation exists, but the order or order line was excluded from the MRP calculation, then a new supply will be suggested. When purchase orders are excluded at header level, their detail lines are excluded, regardless of whether they are included at line level. Purchase orders linked to excluded Sale orders are ignored by the MRP calculation. When a purchase order is linked to a Landed Cost Tracking (LCT) shipment, the due date is set as "firm" and it might not be practical for it to be changed. When an LCT is raised, the purchase order line is flagged so that MRP cannot move it. As it is fixed in this manner, if it is late, then it will not satisfy the demand and Requirements Planning raises a suggestion to cover the shortage. MRP does not schedule purchase orders linked to a LCT shipment. The planner must therefore review late supplies and potential oversupplies.

The sequence in which the calculation determines the warehouse for creating suggested purchase orders is:

A record is inserted into the temporary supply file. The purchase order line is loaded during the netting-off phase.

This phase is performed if you enabled the option: Purchase orders at the Include in requirements calculation field (Requirements Planning Setup) and the Purchase Order module is installed.

Requisition lines excluded from the MRP calculation in the Requisition Entry Maintenance program are ignored by the calculation and are therefore not seen as a source of supply. Excluding requisition lines from the calculation does not prevent the Requirements calculation from raising suggested requisitions for the demand of those items. For example, if a requisition for a job allocation exists, but the requisition line was excluded from the MRP calculation, then a new supply will be suggested.

For requisitions which are not Stores Issues or Transfers, only requisitions created with the user code MRP and having a status of normal or approved are processed. A record is inserted into the temporary supply file. The requisition line is loaded during the netting-off phase.

For requisition Stores Issues:

For requisition Stores Transfers:

Requisition Stores Issues and Transfers are ignored by the Requisition Review and Supply Date Reinstatement programs.

This phase is performed if the following conditions are met:

Before taking the snapshot, the Requirements Calculation program validates warehouse supply chains. If any errors are detected during this validation phase, the requirements calculation aborts indicating that errors were detected during the calculation.

Tip: To generate a report of the validation errors detected:

If a stock item for a warehouse is supplied by another warehouse, instead of a purchase order or job, then it is defined as being transfer-supplied. The Requirements Planning program recognizes these transfer-supplied items and creates a suggested supply chain transfer instead of a suggested job or purchase order to meet the demand. In order for a GIT stock item to be included in the MRP calculation, that stock item may only have one source warehouse defined.

The option: Allow MRP to reschedule goods in transit due dates (Requirements Planning Setup) dictates whether existing Goods in Transit are rescheduled or not. If this option is not selected, then existing Goods in Transit can be moved out to fill a future requirement, and the demand created by this action can be filled either by suggesting a new supply chain transfer and/or moving existing supply chain transfers in. The option Use absolute days when applying lead time to transfer supplied items (Inventory Setup) is applied when creating suggested SCTs and calculating the transaction date and demand date of the transfer supplied item.

MRP includes any quantity that has been dispatched but not invoiced for a Supply Chain Transfer sales order as part of the supply for the item in the target warehouse.

If the supply chain is broken because a warehouse in the supply chain is excluded, a suggested job or purchase order is raised, as the system is unable to raise a supply chain transfer.

A new suggested supply chain transfer can trigger a series of suggested supply chain transfers, as each one in turn creates a new demand. If the demand cannot be satisfied at the top of the supply chain, then a suggested job (for made-in items) or a suggested purchase order (for bought-out items) is raised against the warehouse at the beginning of the chain. The suggested supply chain transfer is based on the warehouse designated as the supply warehouse for the stock item.

Where the transfer warehouse has not been defined at stock code level, the supply chain transfer is based on the warehouse move matrix. Similarly, lead times are based on the warehouse designated as the supply warehouse for the stock item or (if not defined at stock code level) from the warehouse move matrix.

If a transfer supplied item exists in Goods in Transit, but the supplying warehouse is not the normal supplying warehouse then the Requirements Calculation program still takes account of the remaining demand and raises suggestions against the normal supplying warehouse.

Replenishment rules defined against the warehouse for the stock item take precedence over the rules defined against the stock item (i.e. if the re-order quantity for the stock item is defined against the warehouse, then the economic batch quantity defined against the stock item is ignored). Similarly, if the pallet quantity for the stock item is defined against the warehouse, then the pan size defined against the stock item is ignored. (i.e. the EBQ for the item becomes the Re-order quantity against the warehouse and the PAN is the pallet quantity. This is an intentional design to cater for varying sizes. The EBQ and PAN on the stock master are only applied when ordering externally or raising a job).

In addition, the Requirements Calculation program uses the Lead time, Dock to stock and Fixed time periods defined against the warehouse (where defined) instead of the times defined against the stock code. The available date for an existing goods in transit transfer is calculated as the expected due date plus the dock to stock days plus the number of days after stock arrives that it can be used (Requirements Planning Setup).

Batching rules are applied using the rules defined against the target warehouse for the stock item. If these are not defined against the target warehouse, the rules defined against the stock code are used.

If you are not using the full goods in transit facility (Inventory Setup) or you have excluded goods in transit from the requirements calculation (Requirements Planning Setup) then items that are in transit are treated as received by the target warehouse, regardless of whether the target warehouse has received the items.

You use the Supply Chain Review program to review and update suggested supply chain transfers and to create live supply chain transfer orders based on the suggestions from the snapshot files.

Excluding Goods in Transit and Supply Chain Transfers from the MRP calculation (Requirements Planning Setup) does not prevent the Requirements calculation from raising suggested SCTs. Selecting the options in Requirements Planning Setup merely excludes existing GIT/SCT entries from supply and demand. A suggested SCT is raised if the item/warehouse is defined as transfer supplied - this is the purpose of the option against the stock code / warehouse (Inventory Warehouses for Stock Codes). The same applies to jobs and purchase orders - if you choose to exclude the jobs and purchase orders the Requirements Calculation will still generate suggested jobs/purchase orders to satisfy demand.

This phase is only performed if you selected the option: Include all stock codes in requirements (Work in Progress Setup) and the Inventory Control module is installed.

This phase processes each stocked item already in the requirements file and determines the quantity available. This quantity is moved into the quantity available bucket in the past due record.

If there is a quantity in transit then this is added to the quantity available and a separate pegging record is created.

If there is a quantity in inspection then this is added to the quantity available, but no separate pegging record is created. Quantities in inspection that are marked as scrapped and/or rejected are excluded from the quantity available. This applies to both stocked and non-stocked items.

For MPS items where the option: Build schedule is selected at the Include in requirements calculation option (Requirements Planning Setup) the quantity available and safety stock is assumed to be zero.

Stock on hand for expired lots can be included or excluded when determining material requirements. See Lot Traceability Calculation.

In addition, for both stocked and non-stocked items, a temporary index in low level code sequence is created. This is used by the netting-off phase. If the processing stock on hand - requirements file phase is performed, then the next phase will be netting-off.

This phase is performed if you enable the option: Include all stock codes in requirements file (Requirements Planning Setup) and the Inventory Control module is installed.

This phase processes the entire inventory master file and determines the quantity available for each warehouse. This quantity is moved into the quantity available bucket in the past due record.

If there is a quantity in transit, then this is added to the quantity available and a separate pegging record is created.

If there is a quantity in inspection then this is added to the quantity available, but no separate pegging record is created.

If you are using multiple bins (Inventory Setup) and a bin is on hold, then the quantity in that bin is included in the quantity available for the item.

	Quantities in inspection that are marked as scrapped and/or rejected are excluded from the quantity available. Items that are on Full hold (Stock Codes) are included in the calculation and in the pegging information. You will, however, not be able to raise purchase orders or create jobs for these items. Available quantities in bins that are on hold are included in the requirements calculation.

For MPS items where the option: Build schedule is selected at the Include in requirements calculation option (Requirements Planning Setup) the quantity available and safety stock is assumed to be zero. In addition, a temporary index in low level code sequence is created. This is used by the netting-off phase.

This phase is performed if you enable the option: Include all stock in requirements (Requirements Planning Setup).

This phase processes each non-stocked item already in the requirements file and ensures that the quantity available bucket in the past due record is zero. If it does not already exist, then it is created.

In addition, the temporary index in low level code sequence is updated to reflect all the non-stocked items. This is used by the netting-off phase.

This phase is performed if you enabled the options: Schedule jobs and purchase orders according to demand and Include all stock in requirements (Requirements Planning Setup).

This phase processes each non-stocked item in the temporary supply file and ensures that the quantity available bucket of the past due record in the requirements file is zero. If it does not already exist, then it is created.

If there is a quantity in inspection then this is added to the quantity available, but no separate pegging record is created.

Quantities in inspection that are marked as scrapped and/or rejected are excluded from the quantity available. This applies to both stocked and non-stocked items. In addition, the temporary index in low level code sequence is updated to reflect all the non-stocked items. This is used by the netting-off phase.

When using consolidate warehouses, Route 0 is used for the notional part.

The earliest demand date for the co-products for the notional part is used to create the suggested job, even if a co-product is not the driver. The co-product with the highest planning sequence for the first period is selected and the notional part's batching rule is applied to the notional quantity.

When dealing with sequential co-products, the following batching rules do not apply:

When dealing with concurrent and proportional co-products, the following do not apply:

The calculation reverts to using A - Lot for lot when the incorrect batching rule is applied and a message is printed on the report to indicate this.

Fixed time is not applied to the batching rules, because the supply and demand for co-products are accumulated according to the Requirements Planning days defined against the co-products themselves (Setup Options).

One suggested job is created for each period/notional part, using the highest weighted entry for each notional part. Based on the quantities to make for the suggested job, the quantities required for the co-products are reduced across the periods. The shortages are recalculated for the co-products attached to the notional part.

If the planning weighting defined against the co-product (Structures and Routings) is set to zero, then the co-product has no bearing in calculating demand for the notional part. This will mean that, for example, MRP will not suggest a works order for notional parts when demand is a sales order for a co-product.

This phase is always executed.

In this explanation of the netting-off phase, the term dock-to-stock is assumed to mean the sum of the dock-to-stock held on the inventory record of the item under review and the general stock use delay held in the Requirements planning options.

This phase processes the temporary index in low level code sequence, starting from the highest level items working its way to the lowest level items. Non-stocked items are processed last.

During the netting-off process, the current level (together with the stock code being netted-off at that level) is displayed.

For each stock code the following general logic applies:

	You can select the option: Suppress MRP ordering (Requirements Planning Setup) to prevent the Requirements Calculation from raising suggested supplies (i.e. jobs, requisitions or SCTs) for non current revision/releases of ECC items.

This phase is performed if you enabled the option: Requirements planning load levelling (Requirements Planning Setup).

The dynamic capacity profile file is rebuilt by running through all existing and suggested jobs.

The dynamic capacity profile is used to identify and manipulate capacity shortages and bottlenecks using the Load Levelling program.

	Ensure that your capacity calendars are correctly defined and valid. You can also run the Balance function in the WIP Period End program and select the Recreate dynamic capacity profile option.

When the Requirements Calculation program is run, information is extracted from live data files and copied to a snapshot directory. All calculations and manipulations are performed on the information residing in this snapshot directory.

Live files are only updated using the Review and Update programs.

The files copied during snapshot creation depend on which modules are installed, and the Requirements Planning Setup options indicated.

When you run the Requirements Planning Calculation in a C-ISAM environment, a selection of files are copied from the live directories to the snapshot directory, as defined in IMPACT.INI. Then all programs within the Requirements Planning folder on the menu look at the snapshot directory and not at the live files. This allows you to manipulate jobs and purchase orders in a 'what if' scenario without affecting live data. Until you select to create live purchase orders and jobs, everything is manipulated within the snapshot directory. In a SQL environment however, this is not true. The reason is that the copying of SQL tables is extremely resource intensive and hence the Requirements Planning Calculation was taking more than double the amount of time to run when in a SQL environment. A decision was therefore made, based on the fact that you plan for the future, that completed jobs and purchase orders are not be copied to the 'snapshot' directory when run within a SQL environment. Because all Requirements Planning programs are oriented to look at the snapshot files, completed purchase orders and jobs cannot be viewed from the WIP Query program as they were never copied to the 'snapshot' folder.

The following is a list of all the files that could be copied:

For the following tables, only the information for the warehouses included in MRP (Requirements Planning Setup program) are copied when copying data into snapshot:

	Changes to the warehouses to include in Requirements Calculation in Requirements Planning Setup are only applied when a new snapshot is taken. If you take a snapshot and subsequently change the warehouses to include, then you need to rerun the snapshot.

The tables marked with ** are filtered at the time of copying the data into snapshot to reduce the number of rows copied. For example in Lot details, only entries with a quantity on hand are copied.

Additional logic is applied when copying the following tables to ISAM to only copy data actually used for processing:

The following tables are not copied back into SQL as they remain unchanged by requirements calculation:

When using the Inventory Optimization module, you can apply time-phased minimum and maximum stock item levels in Requirements Planning as opposed to fixed minimum and maximum levels.

The Inventory Optimization module is used to calculate and output minimum and maximum (min/max) stock levels for stock items by calendar period. The IO current min/max levels (in the IopStockLevel table) are copied to the snapshot MRP min/max stock level table (MrpStockLevel) and used by the Requirements Calculation to derive an optimal requirement in an environment where demand varies over time. This enables you to more accurately provide sufficient stock cover for the expected variability of the demand at your target service level (IO Policies).

MRP only uses the current min/max levels in its calculations, so you need to ensure that these are updated before running the Requirements Calculation program. Current min/max levels can be updated using the IO Stock Levels Modeling (Functions menu - Update Current) and IO Draft Levels Approval programs. If you do not update the current min/max levels, then the Requirements Calculation uses the min/max levels defined against the warehouse for the stock item (Inventory Warehouse Maintenance for Stock Code) and outputs the error message: IO min/max levels not found for Stock code ' ', Inventory warehouse min/max levels used.

When using Inventory Optimization, the following batching rules and order policies are used by MRP in relation to the current maximum levels (see Stock Codes):

Min/max levels are only applied in MRP if there is demand for the item and the demand is such that if min/max levels are not applied, a stock-out situation will arise. However, if there is sufficient stock on hand to meet demand and the demand does not violate min/max levels (e.g. cause the level to fall below minimum), then the min/max levels do not affect MRP. Min/max levels therefore address demand.

When a quantity on hand for a stock item drops below its minimum level, MRP tries to replenish the order immediately, which may result in he unnecessary expediting of orders. The Apply safety stock time fence rule option in the Requirements Planning Setup program enables you to indicate a time fence during which MRP will not raise demand for minimum levels. When IO min/max levels are applied in the calculation, they will only be applied from the calculation date plus the time fence rule selected (i.e. the demand, manufacturing or planning time fence).

When IO is installed, the safety time fence rule is applied and the min and max levels will only be accounted for outside of the time fence selected.

The IO Min/Max Levels pane in the Requirements Planning Query program displays the minimum and maximum IO levels used in the MRP calculation.

The Target Service Level - defined against the policy (IO Policies) - is crucial in determining the resultant min/max levels. The higher the Target Service Level, the higher the suggested Minimum, and by implication, the higher the suggested Maximum. These min/max levels are used by the MRP calculation to address demand, in conjunction with Batching Rules set against the Inventory Master. It follows therefore that, the higher the Target Service Level, the higher the potential inventory on-hand, and the greater the risk you bear when customers do not purchase your product in the volumes recommended by the Target Service Level. Therefore, suggested supply generated via min/max levels are a sensitive issue in MRP, potentially affecting the profitability of your company. It is recommended that only senior staff are involved in the determination of min/max levels, since this is the level at which decisions affecting profitability are made. In addition, suggested MRP supply must be critically reviewed for feasibility in relation to the target service level set before any action is taken.

During the requirements calculation it is possible that some inconsistencies are discovered. In most cases the calculation program assumes certain defaults and continues with the calculation. In these cases an error log is produced. It is recommended that these are corrected, even if the defaults assumed by the calculation program are correct for you.