Calculation of Average Monthly Demand
In New Zealand the Max/min version is set to Type 1 on the Main detail tab of the SM system parameters. This means the system will calculate the maximum and minimum based on a weighting of the current demand and the previous average demand, as per the following process.
When the option to Generate Max/Min levels is run, the system also calculates the Average Monthly Demand of the part. In order to set the new average demand, the system needs to take certain information into account:
- The system looks at the date the Generate Max/Min Levels program was last run and calculates the number of days between now and then (normally 30 or 31 days + February 28 and 29 days).
- If the part is too new to have had a previous max/min run, the system calculates the number of days between now and the date of creation of the part.
- If the previous AMD is greater than 1, the system applies a factor of 2, and if the previous average demand is less than or equal to 1, the system applies a factor of 6.
Note: The calculation for Average Monthly Demand and generation of Min/Max values happens in Timed Operations on the last day of the calendar month
The calculation applied is:
AMD * Factor + Current demand
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Factor + (number of current days/30)
The calculation is rounded to two places of decimals.
Max/Min Calculation
Updating the Maximum/Minimum stock quantities held against the stock record is an option which is normally run on a monthly basis. The system recalculates the recommended stocking levels against the parts, based on the following information: Note, the default for New Zealand is highlighted below.
Period between orders: This value is held on three different records on the Autoline system. In order of preference, following is a list of the defaults used by the program:
The days between orders on the re-order category
The days between order on the product group unless set to zero or the part carries an invalid product group
The period between orders on the Main detail tab of the SM parameters
Lead time: Lead times are held on four different records on the Autoline system. In order of preference, following is a list of the defaults used by the program:
The lead time on the Prices tab of the part record unless set to zero
The default lead time on the re-order category
The default lead time on the product group unless set to zero or the part carries an invalid product group
The default lead time on the Main detail tab of the SM parameters
Safety coefficient: This value is held on two different records on the Autoline system. In order of preference, following is a list of the defaults used by the program:
The safety coefficient on the re-order category
The coefficient on the product group
Note: It is very important that the Days between Orders and the Lead Time are accurate. The Safety Coefficient is a variable that can be adjusted to influence the Min/Max calculation
Minimum Stock Calculation: The minimum stock level is calculated in the following way:
a = 1 + 0.3 / log (AMD+2)
b = Safety Coefficient + 1
c = (AMD / 30) * Lead Time
Minimum Stock = (a*b*c)+1
Maximum Stock Calculation: The maximum stock level is calculated in the following way:
Min stock+ ((AMD/30)*Period Between Orders)
If the Stock balance item flag on the Description tab of part records is set to N, they are ignored.
If the Non-stock item flag on the Description tab of part records is set to Y, they are ignored.