Warehouse Order Policies

An order policy refers to a set of procedures that a business follows to establish when to replenish stock (e.g. how much to order and the size of the individual orders).

Within SYSPRO, order policies refer to the rules that SYSPRO applies when calculating suggested replenishment orders for purchased or manufactured stock items. The rules let you apply the order policies that your company has formulated.

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Exploring

When businesses formulate their order policies, they weigh up a number of factors including:

  • Cost factors, such as the cost of setting up a production run or the cost of ordering stock from a supplier versus the cost of storing the stock.

  • Logistical factors such as storage space, pack sizes and lead times.

Several different order policies have been created to manage different replenishment models used in warehouses.

Normally MRP only allows replenishment up to the minimum quantity, but the O - Cover shortages less than min overages up to max order policy for example, allows the warehouse to order up to maximum allowed when stockpiling for an upcoming event.

The programs related to this feature are accessed from the Program List of the SYSPRO menu:

  • Program List > Requirements Planning

Order policies are standardized instructions that regulate when material is purchased for the replenishment of stock (e.g. when stock falls below a minimum inventory level).

In SYSPRO, order policies are used by the Requirements Calculation program to suggest purchase requisitions, jobs or stock transfers. They are also used by the MPS Review and MRP Master Production Schedule programs when suggesting build schedules for master production schedule (MPS) items.

The order policy options are only enabled if Q - Apply warehouse order policy is selected against the Batching rule field for the stock item (Stock Code Maintenance).

This order policy covers shortages irrespective of any other settings specified for the warehouse like minimum quantity, etc.

For example:

If the available is 7, the demand 40 and the minimum 20, then MRP will suggest supply of 33. This is the 33 required to meeting the demand (7 - 40 = 33).

The 20 to meet the minimum is ignored.

The 33 will be determined by the other options selected like pan size, multiples of pan, economic batch quantity (EBQ), etc.

If the quantity available minus the demand is less than the minimum level, then MRP will recommend supply to meet demand and to top up to the minimum level.

For example:

If available is 7, demand is 40 and minimum is 20, then the suggested supply will cover the shortage of 40, less the quantity on hand (7 - 40= -33). This is the shortfall that will be added by the system.

As the warehouse minimum is 35, a further order for 35 will be produced to get to the warehouse minimum.

The minimum warehouse quantity should be the minimum stock level being retained in the warehouse. If the available drops below the minimum stock level, suggestions will be raised to achieve the minimum stock level. If demand is raised causing the available quantity to fall below the minimum stock level, suggestions will be raised to satisfy the demand without compromising the minimum stock level.

This ignores the Fixed time period (days) option defined in the Stock Code Maintenance program.

This rule can be used with the Inventory Optimization module. Dynamic safety stock levels can be applied, i.e. minimum stock levels per period, without the need for a maximum stock level. The rule orders up to the minimum regardless of whether the min/max levels are defined against the warehouse or against the Inventory Optimization module.

If demand causes available to be less than the minimum, then MRP will recommend supply up to the maximum.

This ignores the Fixed time period (days) option defined in the Stock Code Maintenance program.

When using the Inventory Optimization module, the goal of this policy is to suggest supply that will satisfy the target service level defined against the IO policy defined in the IO Policies program.

If the business needs to increase stock in preparation for an event, this order policy will allow them to build stock to the maximum, irrespective of how much stock there is in the warehouse. The stock level may go slightly over the maximum quantity, depending upon batch size, but will never go below.

This caters for raising a suggestion when the minimum stock level in the warehouse is greater than the demand. Further supplies can be raised outside of MRP until the maximum is reached, at which time a cancel action is raised (i.e. when the supply quantity exceeds the warehouse maximum for that stock code). This could be used where demand is seasonal and supply can't match demand until a later stage, resulting in an increase in the stock holding level until the maximum has been reached.

This order policy was developed to allow building stock for an event like a promotion and ignores all quantities except maximum quantity and batch size.

For example:

If the warehouse minimum is 100 and the warehouse maximum is defined as 200, the policy will keep 100 in stock using MRP suggestions while taking all demand into account.

Supply created in the form of purchase orders or internal jobs will be kept to a maximum of 200 while considering all demands, stock on hand, etc. The purchase orders or internal jobs in excess of the maximum will be canceled by MRP.

Considerations:

  • This feature is not applied to ECC depletion.

  • This option applies to sites that are not licensed for the Inventory Optimization modules, but which are using warehouse order policies in MRP.

  • This rule can only be used if the Schedule jobs and purchase orders setup option is enabled (Setup Options > Configuration > Manufacturing > Requirements Planning) and when running the Requirements Calculation in legacy mode.

Demand generated for this item will not result in any suggested purchase orders.

This ignores the minimum. The order point is reached when the quantity available is insufficient for the demand.

This ignores the Fixed time period (days) option defined in the Stock Code Maintenance program.

Although a buying rule is typically applied to bought-out items and a batching rule is typically applied to made-in items, these terms are interchangeable within SYSPRO's Requirements Planning system - they indicate how you want to address quantity shortages encountered for a stock item.

The rule defined against each stock item is used to modify the actual shortage quantity in order to calculate an order quantity.

Batching rules are applied to MPS items when producing the MRP Master Production Schedule (unless you are including Build schedules in the requirements calculation) and to non-MPS items when running the Requirements Calculation program.

The order quantity is the shortage quantity.

All sub jobs are automatically created as lot for lot.

You would typically select this batching rule when implementing MRP (Requirements Planning) in SYSPRO for the first time. The rule simply generates planned supply (jobs, purchase order requisitions and purchase orders) for the actual net shortage in demand for each period.

Once you have familiarized yourself with SYSPRO's Requirements Planning module, you can implement the other batching rules as required.

To calculate the order quantity, the shortage quantity is rounded up to the next multiple of the economic batch quantity.

For example:

If the Economic batch quantity is 10 and the shortage is 32, then the order quantity will be 40. 4 x EBQ (10) = 40.

The system will always exceed and never short manufacture/buy.

When a shortage is encountered, the order quantity is calculated by adding all the shortages in the fixed time period ahead (i.e. a consolidation of all orders in the chosen time period into a single order quantity).

For example:

If the shortage is 32 today and 14 tomorrow, and the fixed time period is 1 day (1 future working day) then the order quantity will be 46 (32 + 14).

When a shortage is encountered, the order quantity is calculated to increase the stock holding up to the maximum quantity defined against the warehouse.

For example:

If the shortage is 32 and the maximum quantity is 100, then the order quantity will be 132 (32 + 100). This is because the shortage of 32 must be filled, plus 100 are required to bring the stock holding up to its maximum of 100.

As soon as the result field falls below the minimum quantity (during netting-off) an order quantity is calculated to order enough to increase the quantity available up to the maximum quantity.

For example:

If the minimum quantity is 50 and the maximum quantity is 200 and the result field is 12, then the order quantity will be 188 (200 - 12).

When you select this option, the MPS Review and MRP Master Production Schedule programs use the minimum and maximum quantities defined against the warehouse to calculate the suggestions made. Safety stock is not taken into account.

This rule is identical to rule B, except that the pan quantity is used instead of the economic batch quantity.

To calculate the order quantity, the shortage quantity is rounded up to the next multiple of the pan size.

For example:

If the Pan size is 10 and the shortage is 32, then the order quantity will be 40.

If a shortage occurs, then multiple orders are created to satisfy the shortage, each the size of the Economic batch quantity.

For example:

If the Economic batch quantity is 10 and the shortage is 32, then 4 orders (each having an order quantity of 10) are suggested.

This rule is identical to rule G, except that the pan quantity is used instead of the economic batch quantity.

If a shortage occurs, then multiple orders are created to satisfy the shortage, each the size of the pan.

For example:

If the Pan size is 10 and the shortage is 32, then 4 orders (each having an order quantity of 10) are suggested.

If a shortage occurs, the order quantity is the quantity required to meet the shortage, unless this is less than the Economic batch quantity (in which case the EBQ is used).

For example:

If the Economic batch quantity is 10 and the shortage is 8, then the order quantity is 10 (the 8 required to meet the shortage is less than the EBQ, so the EBQ is used). However, if the shortage is 32 and the Economic batch quantity is 10 then the order quantity is 32.

This rule is identical to rule I, except that the pan quantity is used instead of the Economic batch quantity.

If a shortage occurs, the order quantity is the quantity required to meet the shortage, unless this is less than the Pan size (in which case the Pan size is used).

For example:

If the Pan size is 10 and the shortage is 8, then the order quantity is 10 (the 8 required to meet the shortage is less than the Pan size, so the Pan size is used). However, if the shortage is 32 and the Pan size is 10 then the order quantity is 32.

This rule is a combination of rules B and C.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then this is rounded up to the next multiple of the Economic batch quantity.

This rule is a combination of rules F and C and is identical to rule K, except that the pan quantity is used instead of the economic batch quantity.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then this is rounded up to the next multiple of the Pan size

This rule is a combination of rules G and C.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then multiple orders (each the size of the Economic batch quantity) are suggested.

This rule is a combination of rules H and C and is identical to rule M, except that the pan quantity is used instead of the Economic batch quantity.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then multiple orders (each the size of the pan) are suggested.

If a shortage occurs, the order quantity is at least the Economic batch quantity. However, if the EBQ is insufficient to satisfy the shortage, then the remaining shortage is rounded up to the next multiple of the pan quantity.

For example:

If the Economic batch quantity is 10 and the pan quantity is 5, a shortage of 3 would cause an order quantity of 10 (the shortage is less than the EBQ). A shortage of 23 would cause an order quantity of 25.

Demand generated for this item won't result in any suggested replenishment orders, unless you have indicated that batching rules must be overridden (Setup Options > Preferences > Manufacturing > Requirements Planning).

This is the default batching rule for an item defined as a By-product and cannot be changed.

In addition, when you set the Stock code status to Clear, the batching rule for that stock code is automatically set to P - Suppress MRP ordering. This cannot be changed until the Stock code status is changed to either Normal or Temporary.

This indicates that would like to define the order policies against the individual warehouses in which the item is stocked, using the Warehouse Maintenance for Stock Code program (Program List > Inventory > Setup).

Different order policies can be defined for each warehouse in which the item is stocked. The following order policies are available:

  • C - Cover shortages

  • I - Cover shortages if less than min

  • M - Order to max if less than min

  • O - Cover shortages less than min overages up to max

  • P - Suppress MRP ordering

  • S - Order to max if shortage

Setup programs

Stock Code Maintenance

Warehouse Maintenance for Stock Code

Processing programs

Job Entry

Report programs

Requirements Calculation

Query programs

MPS Review

Requirements Planning Query

Starting

To use this feature, the following setup option(s) must be enabled:

Setup Options > Configuration > Manufacturing > Requirements Planning

  • Schedule jobs and purchase orders

    This setup option must be enabled for the O - Cover shortages less than min overages up to max order policy.

The following modules should not be installed for the O - Cover shortages less than min overages up to max order policy:

  • Inventory Forecasting

  • Inventory Families and Groupings

  • Inventory Optimization

    If the O - Cover shortages less than min overages up to max order policy is defined against a stock code and the inventory file is shared between companies where one company has one of these modules installed, SYSPRO reverts back to using the C - Cover shortages order policy.

You can secure this feature by implementing a range of controls against the affected programs. Although not all these controls are applicable to each feature, they include the following:

  • You restrict operator access to activities within a program using the Operator Maintenance program.
  • You can restrict operator access to the fields within a program (configured using the Operator Maintenance program).
  • You can restrict operator access to functions within a program using passwords (configured using the Password Definition program). When defined, the password must be entered before you can access the function.
  • You can restrict access to the eSignature transactions within a program at operator, group, role or company level (configured using the eSignature Setup program). You can restrict access to the eSignature transactions within a program at operator, group, role or company level (configured using the Electronic Signature Configuration Setup program). Electronic Signatures provide security access, transaction logging and event triggering that gives you greater control over your system changes.
  • You can restrict operator access to programs by assigning them to groups and applying access control against the group (configured using the Operator Groups program).
  • You can restrict operator access to programs by assigning them to roles and applying access control against the role (configured using the Role Management program).

  • The following restrictions and limits apply to the O - Cover shortages less than min overages up to max order policy:

    • A maximum and minimum quantity must be defined in the Warehouse Maintenance for Stock Code program.

    • This order policy is not used in ECC depletion (it does not cater for the ECC deplete oldest rev/rel) and will be replaced with order policy I - Cover shortages if less than min if order policy O - Cover shortages less than min overages up to max is defined for the stock code.

Solving

The following tables indicate how to configure order policies for each stock code and warehouse combination, to provide the same outcome as the batching rules:

Order policies allow for additional combinations which weren't available using the batching rules, such as Minimum of EBQ (fixed time), Minimum of pan (fixed time) and Minimum of EBQ Thereafter Multiples of pan (fixed time).

Order Policy C
Batching rule Fixed time period Order multiples Min order qty Max order qty

A - Lot for lot

The order quantity is the shortage quantity.

1-99

Same as pan

0

0

B - Multiples of EBQ

To calculate the order quantity, the shortage quantity is rounded up to the next multiple of the economic batch quantity.

K - Multiples of EBQ fixed time

This rule is a combination of rules B and C.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then this is rounded up to the next multiple of the Economic batch quantity.

1-99

0

Could be 0

 

C - Fixed time period

When a shortage is encountered, the order quantity is calculated by adding all the shortages in the fixed time period ahead (i.e. a consolidation of all orders in the chosen time period into a single order quantity).

1-99

 

 

 

D - Order to maximum if shortage

When a shortage is encountered, the order quantity is calculated to increase the stock holding up to the maximum quantity defined against the warehouse.

1-99

0

0

0

E - Order to max if less than min

As soon as the result field falls below the minimum quantity (during netting-off) an order quantity is calculated to order enough to increase the quantity available up to the maximum quantity.

1-99

0

0

0

F - Multiples of pan

To calculate the order quantity, the shortage quantity is rounded up to the next multiple of the pan size.

L - Multiples of pan fixed time

This rule is a combination of rules F and C and is identical to rule K, except that the pan quantity is used instead of the economic batch quantity.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then this is rounded up to the next multiple of the Pan size

1-99

Same as pan

Could be 0

 

G - Multiple EBQ lots

If a shortage occurs, then multiple orders are created to satisfy the shortage, each the size of the Economic batch quantity.

M - Multiple EBQ lots fixed time

This rule is a combination of rules G and C.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then multiple orders (each the size of the Economic batch quantity) are suggested.

1-99

0

Same as EBQ

Same as EBQ

H - Multiple pan lots

If a shortage occurs, then multiple orders are created to satisfy the shortage, each the size of the pan.

N - Multiple pan lots fixed time

This rule is a combination of rules H and C and is identical to rule M, except that the pan quantity is used instead of the Economic batch quantity.

The order quantity is calculated by adding all the shortages in the fixed time period ahead.

Once this total shortage quantity has been calculated, then multiple orders (each the size of the pan) are suggested.

1-99

0

Same as pan

Same as pan

I - Min of EBQ

If a shortage occurs, the order quantity is the quantity required to meet the shortage, unless this is less than the Economic batch quantity (in which case the EBQ is used).

1-99

0

Same as EBQ

0

J - Minimum of pan

If a shortage occurs, the order quantity is the quantity required to meet the shortage, unless this is less than the Pan size (in which case the Pan size is used).

1-99

0

Same as pan

0

O - Min of EBQ thereafter multiples of pan

If a shortage occurs, the order quantity is at least the Economic batch quantity. However, if the EBQ is insufficient to satisfy the shortage, then the remaining shortage is rounded up to the next multiple of the pan quantity.

1-99

Same as pan

Same as EBQ

0
Order Policy P
Batching rule Fixed time period Order multiples Min order qty Max order qty

P - Suppress MRP ordering

Demand generated for this item won't result in any suggested replenishment orders, unless you have indicated that batching rules must be overridden (Setup Options > Preferences > Manufacturing > Requirements Planning).

n/a

n/a

n/a

n/a

SYSPRO applies the order policies when calculating the following:

  • Suggested jobs for made-in stock items in the Requirements Calculation program.

  • Suggested purchase requisitions for bought-out stock items in the Requirements Calculation program.

  • Suggested supply chain transfers for transfer-supplied stock items in the Requirements Calculation program.

  • Suggested build schedules for master production schedule (MPS) items in the MPS Review and MRP Master Production Schedule programs.

  • Live build schedules in the Initial Build Extract program.

  1. Within the Stock Code Maintenance program, select the Q - Apply warehouse order policy option at the Batching rule field.

  2. Within the Warehouse Maintenance for Stock Code program, select which order policy you want to use against the Order policy field:

    • C - Cover shortages

    • I - Cover shortages if less than min

    • M - Order to max if less than min

    • O - Cover shortages less than min overages up to max

    • P - Suppress MRP ordering

    • S - Order to max if shortage

  3. Within the Warehouse Maintenance for Stock Code program, define the amounts required against the Minimum quantity and Maximum quantity fields.

    This lets the MRP generate the demand for the order policy.

Prior to the implementation of the order policy functionality, SYSPRO used batching rules with the Economic batch quantity, Pan size and Fixed time period (days) fields defined in the Stock Code Maintenance program to implement order policies.

This functionality has the following limitations:

  • The batching rule is implemented at stock code level, which can't be used when different warehouses have different replenishment rules for the same stock code, as in the following instances:

    • A branch warehouse may have different local costing and storage issues.

    • Manufacturing and distribution warehouses have different requirements (when SYSPRO’s Distribution Requirements Planning is not used).

  • Batching rules had to be hard-coded each time SYSPRO customers wanted to use Economic batch quantity/Pan size/Fixed time period (days) in a different combination as specific wording used in the batching rules (such as EBQ and pan) rather than more generic terms (such as major and minor order multiples).

The order policy functionality and its related fields address these problems and provide more flexibility. Order policies provide the same functionality as batching rules A to P, as well as additional flexibility for to create new combinations of fixed time with order quantities and modifiers.

Using

Setting up order policies for a stock code and warehouse combination differs between transfer-supplied items and non-transfer-supplied items.

Configuring order policies for non transfer-supplied stock codes

  1. Add or maintain the stock code in the Stock Code Maintenance program.

  2. Select Q - Apply warehouse order policy at the Batching rule field of the Replenishment pane of the Stock Code Maintenance program.

  3. Specify the order policy details (such as the minimum and maximum quantities) in the Warehouse Maintenance for Stock Code program.

    The order policy can't be applied if the value is defined as zero in the Minimum quantity and Maximum quantity fields of the Warehouse Maintenance for Stock Code program.

Configuring order policies for transfer-supplied stock codes

  1. Add or maintain the stock code in the Stock Code Maintenance program.

  2. Enable the Transfer supplied item and Use warehouse buying rule fields in the Warehouse Maintenance for Stock Code program and specify the order policy details.

    A value greater than zero must be entered at the Fixed time period (days) field in the Transfer supplied details section in to save your transfer supply details. However, this value is not actually used by the order policies.

    To take fixed time into account, enter the value at the Fixed time period field in the Order policy details section.

The following rules apply to the calculation of order quantities, regardless of the order policy you have selected for the stock code and warehouse combination:

A1

The major order multiple must be less than the minor order multiple in the Warehouse Maintenance for Stock Code program.

If the major order multiple has been set to less than the minor order multiple (using the Report Writer program for example) then the minor order multiple value is used as the major order multiple value during the calculation of the order quantity and vice versa.

A2

The maximum order quantity must be less than the minimum order quantity in the Warehouse Maintenance for Stock Code program.

If the maximum order quantity has been set to less than the minimum order quantity using the Report Writer program for example, then the maximum order quantity is set to 0.

A3

If the maximum order quantity is less than the major order multiple, then the maximum order quantity is set to 0.

A4

If the shortage is more than the maximum order quantity, then an order quantity equal to the maximum order quantity is created and multiple orders thereafter.

A5

If the major order multiple is applied to the order quantity and a remainder exists which results in the order quantity being greater than the maximum order quantity, then the order quantity is reduced by the major order multiple.

A6

If the major order multiple is applied to the order quantity and a remainder exists which results in the minor order multiple being applied to the order quantity, the following occurs:

  • If the minor order multiple causes the order quantity to be more than maximum order quantity, then the order quantity is reduced by the minor order multiple order quantity.

  • If the remainder causes the order quantity to be more than the maximum order quantity, then the order quantity is reduced by the minor order multiple.

A7

If the order quantity is more than the maximum order quantity (after applying the order multiples and adding the minimum order quantity), then the minimum order quantity is subtracted from the order quantity.

A8

If a shortage remains after applying the order modifiers, multiple orders are created until the shortage is satisfied.

The following rules apply to the calculation of order quantities for stock code and warehouse combinations with order policy C:

C1

If the fixed time period is greater than 1, the total shortage for the number of days specified is added before calculating the order quantity.

C2

If you have a minimum order quantity and the shortage is less than the minimum order quantity, then the minimum order quantity is used to create the order and any order multiples are ignored.

C3

If you have a minimum order quantity and the shortage is greater than the minimum order quantity, then the minimum order quantity is subtracted from the shortage and the order multiples are applied to the remaining shortage. Thereafter the minimum order quantity is added to the result to give the final order quantity.

Fixed time is only applied for order policy C.

The following rules apply to the calculation of order quantities for stock code and warehouse combinations with order policy I:

I1

An order is only suggested if the available quantity is less than the warehouse minimum.

I2

If you have a minimum order quantity and the shortage is less than the minimum order quantity, then the minimum order quantity is used to create the order and any order multiples are ignored.

I3

If you have a minimum order quantity and the shortage is greater than the minimum order quantity, then the minimum order quantity is subtracted from the order quantity and any order multiples are applied to the remaining shortage. Thereafter, the minimum order quantity is added again to give the final order quantity.

I4

The maximum quantity against the warehouse is not considered with this order policy. The maximum order quantity is considered and can't be exceeded. If the shortage exceeds the maximum order quantity, then the maximum order quantity is used and any order multiples are ignored.

The following rules apply to the calculation of order quantities for stock code and warehouse combinations with order policy M:

M1

An order is only suggested if the available quantity is less than the warehouse minimum.

M2

If you have a minimum order quantity and the shortage (warehouse maximum– available) is less than the minimum order quantity, an order is not suggested.

M3

If you have a minimum order quantity and the shortage (warehouse maximum – stock available) is greater than the minimum order quantity, then the minimum order quantity is subtracted from the order quantity and any order multiples are applied to the remaining shortage. Thereafter, the minimum order quantity is added again to give the final order quantity.

M4

In the case of a maximum order quantity or multiples, multiple orders are created, as long as the maximum quantity against the warehouse (warehouse maximum - stock available) is not exceeded. No orders are suggested for any remaining shortage once the maximum quantity is exceeded.

The following rules apply to the calculation of order quantities for stock code and warehouse combinations with order policy O:

O1

An order is only suggested if the available quantity is less than the warehouse minimum.

O2

If you have a minimum order quantity and the shortage is less than the minimum order quantity, then the minimum order quantity is used to create the order and any order multiples are ignored.

O3

If you have a minimum order quantity and the shortage is greater than the minimum order quantity, then the minimum order quantity is subtracted from the shortage and the order multiples are applied to the remaining shortage. Thereafter the minimum order quantity is added to the result to give the final order quantity.

O4

Existing supply is checked against the warehouse max and if the max is not exceeded then the supply is not flagged as a cancel action.

The following rules apply to the calculation of order quantities for stock code and warehouse combinations with order policy S:

S1

If you have a minimum order quantity and the total shortage (warehouse maximum + shortage) is the less than the minimum order quantity, no order will be suggested.

S2

If you have a minimum order quantity and the total shortage (shortage + warehouse maximum) is greater than the minimum order quantity, then the minimum order quantity is subtracted from the shortage and any order multiples are applied to the remaining order quantity. Thereafter, the minimum order quantity is added again to give the final order quantity.

S3

Multiple orders are created in the case of a maximum order quantity, unless the warehouse maximum plus the shortage is exceeded. In this case, no orders for remaining shortages are suggested.

The requirements calculation doesn't calculate any replenishment orders for stock shortages with this order policy.

This order policy doesn't suppress the calculation of suggested build schedules for MPS items in the MPS Review and MRP Master Production Schedule programs, or the calculation of live build schedules in the Initial Build Extract. The build schedules are calculated using the lot-for-lot method for MPS items with an order policy of P.

The following examples illustrate the effect of order policies in the requirements calculation in SYSPRO. The order policies are applied at stock code/warehouse level when calculating suggested replenishment quantities.

The examples assume that the available quantity is zero at the start of the first day and that no supplies affect the available quantity other than the calculated order quantity.

These examples demonstrate the effect of order policy C in the calculation of suggested replenishment quantities:

Order Policy Fields Value

Major order multiple

16

Minor order multiple

7

Minimum order quantity

12

Maximum order quantity

200

Fixed time period

1
Data Day 1 Day 2 Day 3

Forecast

8

75

210

Available (includes calculated order quantity from previous day)

0

4

3

Net requirement (shortage)

8

71

207

Order quantity

12

74

12

200

As the requirements calculation is done for a fixed time period of 1, order quantities are calculated for each day (rule C1):

For example:

Day 1:

  1. Shortage = forecast – available

    1. Shortage = 8 - 0 = 8

  2. Minimum order quantity = 12

    As the order quantity is more than the shortage, rule C2 applies making the order quantity 12.

Day 2:

  1. Shortage = 71

  2. Minimum order quantity = 12

    The order quantity is more the minimum order quantity (rule C3).

    1. The order quantity is subtracted from the shortage:

      1. 71 – 12 = 59

    2. The major order multiple is applied to the remaining shortage:

      1. 59 / 16 = 3.6875 rounded down = 3

      2. Quantity calculated = 3 x 16 = 48

      3. Remaining shortage = 59 – 48 = 11

    3. The minor order multiple is applied to the remaining shortage:

      1. 11 / 7 = 1.571 rounded up = 2

      2. Quantity calculated = 2 x 7 = 14

    4. The minimum order quantity is re-added to the calculation:

      1. Order quantity = 48 + 14 + 12 = 74

Day 3:

  1. Shortage = 207

    The shortage is more than the maximum order quantity of 12 (rule A4).

  2. Calculate order quantity:

    1. First order quantity = maximum order quantity = 200

    2. Remaining shortage = Shortage – first order quantity

      1. 207 – 200 = 7

      As the remaining shortage is less than minimum order quantity, the second order quantity = minimum order quantity = 12 (rule C2).

In this scenario, the requirements calculation is performed for a fixed time period of 3:

Data Day 1 Day 2 Day 3

Forecast

8

75

70

Available for each day (excluding order quantities)

0

0

0

Net requirement for each day (shortage)

8

75

70

Order quantity

154

0

0

Balance (includes order quantity)

146

71

1

As the fixed time period is more than 1, the shortages are added for the number of days specified before calculating the order quantity for the first day (rule C1).

For example:

  1. Shortage = shortage day 1 + shortage day 2 = shortage day 3

    1. 8 + 75 + 70 = 153

      The shortage is more than the minimum order quantity of 12 (rule C3).

  2. Shortage – minimum order quantity

    1. 153 – 12 = 141

    2. Apply major order multiple to the remaining shortage

      1. 141 / 16 = 8.8125 rounded down = 8

      2. Quantity calculated = 8 x 16 = 128

      3. Remaining shortage = 141 – 128 = 13

    3. Apply minor order multiple to the remaining shortage:

      1. 13 / 7 = 1.8571 rounded up = 2

      2. Quantity calculated = 2 x 7 = 14

    4. Add minimum order quantity to the quantities calculated

      1. The order quantity for the 3 days = 128 +14 + 12 = 154

This example demonstrates the effect of order policy I in the calculation of suggested replenishment quantities:

Order Policy Fields Value

Warehouse minimum

250

Warehouse maximum

0

Minimum order quantity

12

Maximum order quantity

200

Fixed time period

1
Data Past due Day 1 Day 2 Day 3

Forecast

0

8

75

210

Available

0

250

254

250

Net requirement (demand)

0

8

75

210

Order quantity

250

12

71

212

For example:

Past due:

  1. Shortage = minimum warehouse level = 250

  2. Supply = 250

  3. Available = supply + (quantity on hand) - shortage

    1. 250 + 0– 0 = 250

  4. Warehouse minimum = 250

  5. Minimum order quantity = 12 (this is used to create the order quantity (supply)

  6. Maximum order quantity = 200 (this is used to cap the order quantity (supply)

  7. Supply = 250 (Warehouse maximum = 0)

Day 1:

  1. Shortage = forecast – available

    1. 8 – 250 + 12 (warehouse minimum + minimum order quantity) = 250 (BODMAS)

  2. Supply = 12

  3. Available = supply + (quantity on hand) – shortage

    1. 12 + 250 – 8 = 254

  4. Minimum order quantity = 12 (this is used to create the order quantity (supply)

  5. Maximum order quantity = 200 (this is used to cap the order quantity (supply)

  6. Supply = 12 (stock can't fall below the warehouse minimum)

Day 2:

  1. Shortage = forecast – available

    1. 75 – 254 + 71 = 250

  2. Supply = 71

  3. Available = supply + (quantity on hand) – shortage

    1. 71 + 254 – 75 = 250

  4. Minimum order quantity = 12 (this is used to create the order quantity (supply)

  5. Maximum order quantity = 200 (this is used to cap the order quantity (supply)

  6. Supply = 71 (stock can't fall below the warehouse minimum)

Day 3:

  1. Shortage = forecast – available

    1. 210 – 250 + 212 = 252

  2. Supply = 212

  3. Available = supply + (quantity on hand) – shortage

    1. 212 + 250 – 210 = 252

  4. Minimum order quantity = 12 (this is used to create the order quantity (supply)

  5. Maximum order quantity = 200 (this is used to cap the order quantity (supply)

  6. Supply = 212

This example demonstrates the effect of order policy M in the calculation of suggested replenishment quantities:

Order Policy Fields Value

Major order multiple

250

Minor order multiple

50

Minimum order quantity

0

Maximum order quantity

400

Warehouse minimum

100
Warehouse maximum

500
Data

Past due

 Day 1 Day 2 Day 3

Balance from previous day

0

500

492

500

Forecast

0

8

492

550

Available

0

492

0

0

Shortage

0

0

0

50

Below minimum of 100

Yes

No

Yes

Yes

Total shortage (shortage + warehouse maximum)

500

0

500

550

Order quantity

400

100

0

400

100

400

150

For example:

  1. Available stock < warehouse minimum

    1. 0 < 100

      Calculate the suggested replenishment orders (rule M1).

  2. Total shortage > maximum order quantity

    1. 500 > 400

      The first order quantity is 400 (rule A4).

  3. Remaining shortage = total shortage - first order quantity

    1. 500 – 400 = 100

  4. Remaining shortage < maximum order quantity:

    1. 100 < 400

      The remaining shortage is less than the minimum order quantity, which is 0 (rule M4).

    2. Apply major order multiple to the remaining shortage:

      1. 100 / 50 = 2 with no remainder

      2. Quantity calculated = 2 x 50 = 100

    3. There is no remaining shortage, therefore the second order quantity is 100.

Day 1:

The available stock is more than the warehouse minimum, therefore there are no suggested orders.

Day 2:

  1. Available < warehouse minimum.

    1. 0 < 100

      Calculate suggested replenishment orders (rule M1) as for day 1.

Day 3:

  1. Available < warehouse minimum, therefore calculate suggested replenishment orders (rule M1).

    1. 0 < 100

  2. Total shortage is more than the maximum order quantity

    1. 550 > 400

      The first order quantity is 400 (rule A4).

  3. Remaining shortage

    1. 550 – 400 = 150

  4. Remaining shortage < maximum order quantity

    1. 150 < 400

      Minimum order quantity is 0 (rule M4).

    2. Apply the major order multiple to the remaining shortage:

      1. 150 / 50 = 3 with no remainder

      2. Quantity calculated = 3 x 50 = 150

    3. There is no remaining shortage, therefore the second order quantity = 150.

This example demonstrates the effect of order policy O in the calculation of suggested replenishment quantities:

In this example, the MRP calculation must be re-run daily to include the live jobs that were created manually.

Order Policy Fields Value

Warehouse minimum

250

Warehouse maximum (mandatory > warehouse minimum)

400

Minimum order quantity

12

Maximum order quantity

200

Fixed time period

1
Data Past due Day 1 Day 2

Forecast

0

8

75

Available

0

250

392

Net requirement (demand)

0

8

75

Order quantity (supply)

250

150

71

For example:

Past due:

  1. Shortage = minimum warehouse level = 250

  2. Supply = 250

  3. Available = supply + (quantity on hand) - shortage

    1. 250 + 0– 0 = 250

  4. Warehouse minimum = 250

  5. Minimum order quantity = 12 (this is used to create the order quantity (supply)

  6. Maximum order quantity = 200 (this is used to cap the order quantity (supply)

  7. Supply = 250 (maximum order quantity = 200 + (cover shortage = 50))

Create suggested job for 200 and 50.

Day 1:

  1. Shortage = forecast – available

    1. 8 – 250 + 12 (warehouse minimum + minimum order quantity) = 254 (BODMAS)

  2. Supply = 12

  3. Available = supply + (quantity on hand) – shortage

    1. 12 + 250 – 8 = 254

  4. Minimum order quantity = 12 (this is used to create the order quantity (supply)

  5. Maximum order quantity = 200 (this is used to cap the order quantity (supply)

  6. Supply = 12 (stock can't fall below the warehouse minimum)

Create a job for 150 manually.

Day 2:

  1. Shortage = forecast – available

    1. = 75 – 392

    2. = -317 x -1 = 317

  2. Supply = 0

  3. Available = supply + (quantity on hand) – shortage

    1. 0 + 392 – 75 = 317

  4. Minimum order quantity = 12 (this is used to create the order quantity (supply)

  5. Maximum order quantity = 200 (this is used to cap the order quantity (supply)

  6. Supply = 71 (stock can't fall below the warehouse minimum)

Add a job for 300 (there is no cancel action)

Add a job for 1 (there is a suggested cancel action) this exceeds the warehouse maximum

This example demonstrates the effect of order policy S in the calculation of suggested replenishment quantities:

Order Policy Fields Value

Major order multiple

10

Minor order multiple

4

Minimum order quantity

5

Maximum order quantity

60

Warehouse maximum

100
Data Day 1 Day 2 Day 3

Available (includes calculated order quantity from previous day)

0

100

25

Forecast

13

75

70

Shortage

13

0

45

Net requirement (shortage + warehouse maximum)

113

0

145

Order quantity

60

53

0

60

60

25

For example:

Day 1:

  1. Shortage + warehouse maximum is greater than the maximum order quantity.

    1. (13 + 100) > 60

      The order quantity is 113, therefore the first order quantity is 60 (rule A4).

  2. Remaining shortage = order quantity - maximum order quantity

    1. 113 - 60 = 53

      The remaining order quantity is 53, i.e. less than the maximum order quantity of 60 (rule S2).

  3. Remaining order quantity - minimum order quantity

    1. 53 – 5 = 48

    2. Apply major order multiple to the remaining shortage:

      1. 48 / 10 = 4.8 (rounded down to 4)

      2. Quantity calculated = 4 x 10 = 40

      3. Remaining shortage = 48 – 40 = 8

    3. Apply minor order multiple to the remaining shortage:

      1. 8 / 4 = 2

      2. Quantity calculated = 2 x 4 = 8

    4. Add minimum order quantity to the quantities calculated:

      1. Second order quantity = 0 + 8 + 5 = 53

Day 2:

There are no suggested orders as there is no shortage.

Day 3:

  1. Shortage + warehouse maximum is less than the maximum order quantity.

    1. (45 + 100) > 60

      The first order quantity is 60 (rule A4).

  2. Remaining shortage = first order quantity - maximum order quantity

    1. 145 – 60 = 85

      The remaining order quantity is 85, i.e. more than the maximum order quantity of 60 (rule A4).

  3. Further remaining shortage

    1. 145 – 120 = 25

      The further remaining shortage is 25, i.e. less than the maximum order quantity of 60 (rule S2).

    2. Shortage – minimum order quantity:

      1. 25 – 5 = 20

      2. 20 / 10 = 2 with no remainder

      3. Quantity calculated = 2 x 10 = 20

    3. Add minimum order quantity to the quantity calculated:

      1. Third order quantity = 20 + 5 = 25

In SYSPRO, live build schedules typically form the independent demand that drives the MRP calculation for master production schedule (MPS) stock items. The master scheduler adds these build schedules as required or converts suggested build schedules (calculated by SYSPRO) to live build schedules.

Suggested build schedules are calculated by the MPS Review program based on a number of inputs, including the selections made at the Gross requirement rule option for each MPS item (Setup Options > Preferences > Manufacturing > Requirements Planning).

SYSPRO applies the order policies during the calculation of suggested build schedules following a similar procedure as detailed in the requirements calculation examples, except:

  • The fixed time period is not applied.

  • Discrete order quantities calculated for any particular day are totaled to give the suggested build schedule for that day.

When the material planner runs the requirements calculation, SYSPRO applies the order policies to any shortages for included MPS items using the same calculation as for any other included item.

If the Build schedule setup option is disabled (Setup Options > Preferences > Manufacturing > Requirements Planning) when running the requirements calculation, then build schedules are ignored and the Requirements Calculation derives the MPS demand from other sources based on the selections at the Gross requirement rule fields of the Stock Code Maintenance program and the other setup options in the Planning section.

These examples demonstrate the effect of order policy C in the calculation of suggested replenishment quantities:

Order Policy Fields Value

Major order multiple

16

Minor order multiple

7

Minimum order quantity

12

Maximum order quantity

200

Fixed time period

1
Data Day 1 Day 2 Day 3

Forecast

8

75

210

Projected available

0

4

3

Shortage

8

71

207

The suggested build schedules that the MPS Review program calculates for an MPS item with the above order policy settings are as follows:

For example:

Day 1:

  1. Shortage = forecast – available

    1. Shortage = 8 - 0 = 8

  2. Shortage < minimum order quantity

    1. 8 < 12

    As the order quantity is more than the shortage, rule C2 applies making the order quantity 12.

Day 2:

  1. Shortage = forecast – available

    1. 75 – 4 = 7

      The shortage is more than the minimum order quantity (rule C3).

  2. Shortage - minimum order quantity

    1. 71 – 12 = 59

  3. Apply major order multiple to the remaining shortage:

    1. 59 / 16 = 3.6875 rounded down = 3

    2. Quantity calculated = 3 x 16 = 48

    3. Remaining shortage = 59 – 48 = 11

  4. Apply minor order multiple to the remaining shortage:

    1. 11 / 7 = 1.571 rounded up = 2

    2. Quantity calculated = 2 x 7 = 14

  5. Re-add the minimum order quantity to the quantities calculated

    1. Suggested build schedule = 48 + 14 + 12 = 74

Day 3:

  1. Shortage = forecast – available

    1. 210 - 3 = 207

      207 > maximum order quantity, therefore apply rule A4.

      1. First order quantity = maximum order quantity = 200

      2. Calculate remaining shortage: shortage - first order quantity

        1. 207 – 200 = 7

  2. Remaining shortage < minimum order quantity.

    1. Second order quantity = minimum order quantity = 12 (rule C2)

  3. Add all order quantities for the day

    1. Suggested build schedule = 200 + 12 = 212