How Need is Calculated

The initial step in determining Item Need is a comparison of the quantity in the Expected and Reorder columns.

• If the Expected quantity is higher than the Reorder quantity, Expected is used
• If Reorder quantity is higher than the Expected quantity, Reorder is used.

 

Then, the On Hand and On Order quantities are subtracted from either Expected or Reorder to generate the Need quantity.

Expected/Reorder – On Hand – On Order = Need

 

Using Expected to calculate Need

Using Item 13082 as the example from the Item grid above

Expected quantity is 8 and Reorder is 0, Expected is used to calculate need.

 

Using Reorder Point to calculate Need

Using Item 11959 as the example from the Item grid above

Expected quantity is 5 and Reorder is 50, Reorder is used to calculate need.