How to Manage Inventory Reorder Points in Sage 100

In Sage 100, the reorder method is used to generate a recommended reorder quantity on the Inventory Reorder Report. The recommended reorder quantity is based on the actual quantity available (the on-hand quantity increased or decreased by the quantity on sales order, on purchase order, on work order, and required for work orders, and on back order) and your entries in the Economic Qty, Reorder Point Qty, Min Order Qty, and Max On Hand Qty fields.

Let’s start with a few definitions:

  • Economic Qty - Economic Quantity to reorder by the most economic quantity. This amount is the quantity normally reordered. If the available quantity falls to or below the reorder point, the recommended reorder amount is the quantity entered in the Economic Qty field.

  • Reorder Point Qty - Reorder Point to maintain the available quantity at the reorder point. The amount should be the minimum available quantity at which to reorder this item. The recommended reorder quantity is the difference between the reorder point and the quantity available.

  • Min Order Qty - Minimum Stock Level to maintain an available stock level that does not fall below a set minimum. The amount of the minimum quantity is never more than the recommended reorder quantity, regardless of the reorder method.

  • Max On Hand Qty - Maximum Stock Level to maintain an available stock level that does not exceed a set maximum. The amount should be as large as, or larger than, the amount entered in the Reorder Point Qty field plus the smallest order quantity you would ever order. If the available quantity falls to or below the reorder point, the recommended reorder amount is the difference between the maximum on-hand amount and the quantity available.

Reporting

Once you have your inventory reorder points setup, you can turn to reporting and better manage the business. Inventory Requirements Planning helps manufacturers and distributers to quickly take into account and evaluate demand based on open sales orders and production material requirements. It also looks at supply, based on inventory stock levels (reorder points) and open purchase orders. Build times, lead times, and supply and demand functions are all combined to calculate the need for each inventory item.

The Inventory Reorder Report lists current on hand, purchase order, sales order, and back order quantity information for each selected item. In addition, the report prints a recommended reorder quantity, which is based on the reorder information entered in Item Maintenance. The report can contain reorder information or actual period-to-date, year-to-date, and prior-year quantities sold.

The Inventory Stock Status Report displays the quantity on hand, on back order, on purchase order, on sales order, on work order, reorder point, average cost, warehouse detail, and required for work order for each item listed. In addition, the quantity available for sale (calculated by subtracting the quantity on sales order and quantity on back order from the quantity on hand) is shown as of the current date.

The IRP Report lists concluding information from the most recently run IRP Generation process. The report includes current on-hand inventory information, and detail for all demand and supply information for each item. The report displays recommended actions, quantities, the action by date, and any new required dates. The report can be printed in detail or summary format for all items, a selected range of items, or for certain product or procurement types.

Summary

Inventory reorder points and the subsequent reporting are some of the most common questions we receive from customers today. If what we have written above leads to more questions than answers for you, just let us know and we will step in to help setup a streamlined inventory reorder system for your business.

Greg Tirico