This page enables you to define the inventory policies available in the app.

Manage Inventory Policy Types

This card enables you to delete inventory policy types.

To delete an inventory policy type, select the Delete? option to the right of the policy types to be deleted.

Policy Types can't be selected for deletion if they have any policies associated with them.

Note: Policy Types marked for deletion will be removed by a batch deletion process.

Show Next Available Policy Type

Select the Show Next Available Policy Type option to refresh and display the latest available policy types.

Show Next Available Policies

Select the Show Next Available Policies option to refresh the policies and display the latest available policies.

Manage Inventory Policies

This table lists all the inventory policies. You can change a policy's details if the Allow Policy Changes option is enabled in 900 – Global Parameter.

Parameters

ParameterValue
Policy NameDouble click inside the column to change the policy name.
Delete?

Select this option to mark the policy for deletion. The policy is deleted as a part of the batch deletion process.

Policies can't be deleted when in use.

Reorder Point Strategy

Specifies when new inventory can be received rather than when orders can be placed. The value selected dictates which of the Periods per Review, Minimum Days Supply, and Minimum Days Supply columns require completion. The values are: 

  • Days Supply: Day's Inventory is ordered so it's received to prevent the closing balance dropping below a minimum.  
  • Periods Supply: Period's Inventory is ordered so it's received to prevent the closing balance dropping below a minimum.
  • Periodic Review: Periodic Inventory is ordered so it's received in line with a determined review cycle.  
  • Fixed Quantity: Fixed Inventory is ordered so it's received to prevent the closing balance dropping below a minimum.   
  • Do Not Order: New inventory receipts aren't allowed.
Periods per ReviewSpecifies the number of periods between which the inventory can be received at the location.
Minimum Days SupplySpecifies the minimum days of demand that the closing inventory needs to cover. 
Minimum Periods SupplySpecifies the minimum periods of demand that the closing inventory needs to cover. 
Target Level Strategy

Specifies the basis for setting an inventory target. The value selected dictates which of the Target Basis, Target Periods Supply, and Target Days Supply columns require completion. The values are: 

  • Calculated: When new inventory is received, the quantity is set to take the closing balance up to a maximum. The Target Basis value controls the maximum value.
  • Fixed: When new inventory is received, the quantity is set to take the closing balance up to a maximum. The maximum is a fixed input for the particular product-location.  
Target Basis

Specifies how the maximum inventory value is calculated. Policies with a service level Target Basis, must have the Reorder Point Policy value set to Periodic Review.

The values are:

  • Days Supply: Displays the maximum inventory value in terms of number of days of future demand. 
  • Period Supply: Displays the maximum inventory value in terms of number of periods of future demand.
  • Service Level: Displays the maximum inventory value in terms of a service level. If selected, the Service Level Type, Target Service Level/Fill Rate, and Input to Safety Stock fields require completion.
Target Period SupplySpecifies the maximum periods of demand that the closing inventory needs to cover. 
Target Days SupplySpecifies the maximum days of demand that the closing inventory needs to cover. 
Service Level Type

Specifies the service level. The values are:  

  • Cycle Service Level: The service level means the probability of not stocking out in a given period. 
  • Fill Rate: The percentage of demand that's likely to be met. 
Target Service Level/Fill RateSpecifies the probability or percentage expressed in terms of the service level type. 
Input to Safety Stock

Specifies the measure of variability the safety stock needs to protect against.   

  • Demand Variability: Uses standard deviation of selected history. 
  • Forecast Error: Uses an average forecast error. 
  • Corrected Forecast Error: Uses an average forecast error after outlier correction.   
Lead Time Variability BasisSpecifies the time variability to transport the product.
Allow Plan OverridesControls whether the plan can be overridden.

Additional information

Service level targets that suggest a negative safety stock, have the safety stock set to zero.