Min-Max Planning

By

Dinesh Kumar

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Agenda Inventory Planning and Replenishment About Min-Max Profiles used by Min-Max planning Reorder Quantity Calculation Min- Max planning parameters Min-Max Planning,

– Organisation level– Subinventory level– Example

Min-Max setups and Simulation Tables involved

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Inventory Planning & Replenishment methods

Oracle inventory manage your inventory levels using any combination of the system’s planning and replenishment features,including

– Min-Max Planning– Re-order point Planning– Replenishment Counting– Kanban Replenishment

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Inventory Planning & Replenishment methods

• It involves answering two questions,

• When should you place a new order?“Total Available Qty” < Min Qty

• How much you should order?Maximum Qty – Total Available

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About Min-Max planning

Min-Max planning is to maintain inventory levels for all of your items or selected items.

We specify minimum and maximum inventory levels for our items with min-max planning

Suggests a new purchase requisition,internal requisition,move order to bring the on-hand quantity back to the maximum when it goes below the minimum.

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Profile used by Min-Max planning INV_MINMAX_REORDER_APPROVED (INV: Minmax Reorder

Approval)

– This profile determines whether restock orders generated by min-max

are created with status already set to ‘approved’, or require additional

processing for approval. It affects Purchase Orders, Requisitions and

WIP work orders (but not Inventory move orders).

– It has two values: “Incomplete” and “Approved”. Inventory predefines

a value of Approved for this profile for all levels upon installation. If

you choose Incomplete, you can load requisitions as unapproved and

use the document approval functionality in Oracle Purchasing. For WIP,

setting the profile to Approved ensures that the job or schedule is in a

status of Released upon creation (a profile value of Incomplete will set

the job status to Unreleased).

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Profile options continued……… INV_PURCHASING_BY_REVISION (INV: Purchasing By Revision)

– If this profile is set to “Yes” the report will choose the highest valid

revision of a revision controlled item and specify this revision for the

purchase orders or requisitions that are created for restocking

INV_ROUND_REORDER_QTY (INV: Round Reorder Qty)

– Only used if a fixed lot multiple is specified for a min-max planned item.

– Defining a fixed lot multiple ensures that reorder quantity is adjusted

upwards or downwards to make it an even multiple of that value

– If the profile is set to “Yes” the reorder quantity is rounded up and if it is

set to “No” the reorder quantity is rounded down

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Reorder Quantity Calculation

Total Available < Minimum

for Item

Total Available >=Minimum

for Item

How much to Reorder ???Reorder Quantity = Maximum Stock ableQty – Total Available

Fixed Lot MultipleDefined?

Take the INV_ROUND_REORDER_QTY profile values in consideration

If Min and Max order quantities specified then consider them for reorder

qty calculation

Arrive at a final reorderquantity

Yes No

ReorderQuantity ?

No

Yes

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Min – Max planning parameters

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Organization Level Min-Max Planning

Total Available= Quantity on hand + Supply – DemandSupply Demand

Inventory balances, Purchase requisitions, Internal requisitions, Internal sales orders and WIP jobs

Sales orders, WIP job component requirements, and Account issue move orders

• Oracle inventory offers the options to consider net demand(s) by passing the value Yes/No against them.

• Net Demand parameters are - Net Reserved Orders, Net Unreserved Orders, Net WIP Demand, Non-Nettable inventory quantities

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NET Demand Options: If Set NO Total available = Nettable Qty on Hand + On Order

NET Demand Options: If Set YES Total available = Nettable Qty on Hand + On Order–“Open

Demand”

Organization Level Min-Max Planning

Where,• Nettable Qty on Hand = sum of the quantities on hand for the

item across all the nettable sub inventories within your organization

• On Order = sum of all requisitions(purchase/internal), orders(purchase/internal) and WIP jobs

• Open demand = Sum of unreserved sales orders, inventory reservations, reserved sales orders, account issue move orders and WIP component.

If Total available < Minimum Quantity thenOrder quantity = Maximum Quantity – Total available

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Sub inventory Level Min-Max Planning

Total Available= Quantity on hand + Supply – DemandSupply Demand

Inventory balances, Purchase requisitions, Internal requisitions, and move orders

Sales orders, Account issue move orders and sub inventory transfer move orders scheduled ship from this sub inventory

• Oracle inventory offers the options to consider net demand(s) by passing the value Yes/No against them.

• Net Demand parameters are - Net Reserved Orders, Net Unreserved Orders, Non-Nettable inventory quantities

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NET Demand Options: If Set NO Total available = Nettable Qty on Hand + On Order

NET Demand Options: If Set YES Total available = Nettable Qty on Hand + On Order–“Open

Demand”

Sub inventory Level Min-Max Planning

Where,• Nettable Qty on Hand = is the quantity in the sub inventory you

specified in the Min-Max planning report• On Order = sum of all requisitions(purchase/internal),

orders(purchase/internal) and sub inventory transfer move orders to the specified sub inventory

• Open demand = Sum of inventory reservations( including reserved sales orders), account issue move orders and sub inventory transfer move orders scheduled to ship from specified sub inventory.

If Total available < Minimum Quantity thenOrder quantity = Maximum Quantity – Total available

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Example • Assume an item has the following quantity values and item attribute setting

• Nettable Qty on hand = 25

• Open supply quantity = 50

• Open demand(reserved SO qty) = 100

• Min-max minimum quantity = 100

• Min-max maximum quantity = 500Description NET Demand = No NET Demand =

Yes

Total Available 25+50 = 75 (25+50) – 100 = (-25)

Below Min Qty(100) ? Yes Yes

Order Qty (Max Qty – Total Available)

500 – 75 = 425 500-(-25) = 525

Assumption – supply/demand is within the cut-off date

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Min-Max Setups and Simulation

At Sub inventory level

– Create XYZMMX1 as sub inventory level min-max planned item with source type of sub inventory

– Receive 1500 units of XYZMMX1 into org M1, sub inventory FGI

– Receive 10,000 units of XYZMMX1 into org M1, sub inventory stores

– Setup M1 to automatically approve move orders– Run Min-Max to create the replenishment move order

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Continued…….

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Continued…….

InventorySupplier

Sub inventory

You are specifying item to be planned at sub inventory level

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Continued…….

Miscellaneous Transactions - Receipt

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Continued…….

Create a move order requisition for 1000 units of XYZMMX1 from sub inv FGI to Store sub inv

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Continued…….

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Continued…….

Replenish--ment Qty

9500

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Continued…….

Created a Replenishment

move order

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Min-Max Setups and Simulation

At Organization level

– Create XYZMMX2 as org-level min-max planned item with source type of supplier

– Receive 1500 units of XYZMMX2 into org M1,sub inventory FGI

– Setup M1 to automatically approve move orders– Run Min-Max to create the purchase requisitions

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Continued…..

You are specifying your item to be planned at the Organization level with a replenishment type of supplier.

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Continued…..

Item assigned to org M1

Miscellaneous Receipt

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Continued…..

Created a move order Issue for 1000 units of XYZMMX2

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Continued…..

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Continued…..

We should have on on-hand quantity of 1500 with an outstanding demand of 1000 on an org-level due to our move order of transaction type of move order issue. Therefore, the report should show replenishment quantity of 9500 and should automatically create a purchase

requisition to fulfill the replenishment.

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Continued…..

After running Min- Max record has been inserted into Interface table

Run Requisition import program which created a Purchase Requisition for replenishment.

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Major Tables involved

PO_REQUISITIONS_INTERFACE_ALL

WIP_JOB_SCHEDULE_INTERFACE

MTL_SYSTEM_ITEMS_B

MTL_ITEM_SUB_INVENTORIES

MTL_PARAMETERS

MTL_SECONDARY_INVENTORIES

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Thank You!