The end-of-period menu contains programs that should be run at the end of each inventory period.
The Item Activity Report is an optional report that prints each item’s activity for the period. The report shows the on hand quantity at the beginning of the period, receipts, production, adjustments, transfers and sales for the period and the calculated on hand quantity for the end of the period. Since the activity is removed during the End-of-Period Update, make sure you run the Item Activity Report before the End-of-Period Update. Otherwise the report is not available for the period. Item activity is grouped according to receipts, production (manufacturing), transfers, adjustments and sales. The calculated ending balance equals the period beginning quantity plus receipts plus produced plus adjustments plus transfers in minus transfers out minus sales. Throughout the period, the calculated ending balance may not equal the actual on hand because in most cases the actual on-hand quantities are updated immediately, whereas the calculated quantities (i.e., sales) are not updated until the register (i.e., Daily Sales Register) is updated. At the end of the period after all registers have been updated, the two quantities should be the same.
The Serial/Lot number Removal Register enables you to print a register of all serial/lot numbers with a sold status that meets entered criteria. An update may be run to remove these sold records (items) from the system. Report information includes: warehouse, item number and description, serial/lot flag, serial/lot number, purchase order number, date received, vendor number, units received, buying unit of measure, cost, costing unit of measure, last sale date, invoice number, customer number, units sold, selling unit of measure, price sold at, and pricing unit of measure. Note: The Serial/Lot Number Removal Register program also includes items setup in alternate bin locations.
If you use ledgercards for warehouse/item combinations, you can remove them during the end-of-period process with the System Clean Up F/M (SMF993). The System Clean Up F/M (SMF993) program also checks to make sure there are no updated PO receipts that have not been run through the register to prevent problems with writing the ledgercard from the PO register once the ledgercards have been resequenced. If there are outstanding updated receipts, the system displays a message indicating there are outstanding updated receipts. Ledgercards can be sorted by item, alpha, vendor or item class order based on a transaction cutoff date. This program is a recommended part of the end-of-period procedures.
The End-of-Period Update program updates period information and resets restocking information. During this process, items are flagged. The program rolls usage rates back one period and sets qualified usage for the most recent period. The program also resets order points, line points, minimum and maximum stocking levels and order quantities and flags usage for high sales, low sales and/or stock outs for stocked items with the warehouse level Replenish flag (on the Main view of Warehouse/Item F/M) set to "selected". If the item is not a stocked item with the warehouse level replenishment flag set to "selected", then the item’s usage will not be flagged.
Usage is the amount of movement (sales, transfers out, manufacturing components) for a stocked item in a month (i.e., amount used in a month).
The usage for the period must be qualified, (i.e., usage is set). The item is flagged (usage is disqualified) in the following cases:
• The item (nonseasonal) has high sales for a period — the usage for a period is greater than the last five period’s sales combined
• •The item (seasonal) has high sales for a period — the usage for a period is greater than the past two period’s usage, plus the current and next period’s usage from the previous year
• The item has low sales for a period — the usage for the average of the last five periods, plus the current period divided by 6 is less than 1/2 unit (except for those items that are being ignored for low sales).
• The item (seasonal) has low sales for a period — the usage for one of the following periods is less than 1/2 unit (except for those items that are being ignored for low sales): the last two periods and the current and next period from the previous year.
• The item has a lengthy stockout — when the item is out of stock for a time period of greater than 13 days.
Finally the usage rate is calculated. For highly seasonal items the usage rate is calculated as the average usage of the upcoming 3 periods based on those 3 periods as of a year ago. For seasonal items the usage rate is calculated as the average usage of the upcoming 6 periods based on those 6 periods a year ago. For non-seasonal items the usage rate is calculated as the average usage of the last six periods.
The last five lead times and average lead time (average of last two lead times) are updated and maintained by the system any time inventory is received into the warehouse. The lead time is flagged at the time inventory is received if it is abnormal. An abnormal lead time is one in which the new average is 50% shorter or longer than the previous average.
If the adjustment type is "R" for receipt and the restocking warehouse is direct from the vendor, the lead-time is set to abnormal only if the item is stocked and the replenishment flag (located on the Main view of Warehouse/Item F/M) is selected. Otherwise, the lead-time flag is blank.
If usage is qualified the program resets the order quantity.
If the order quantity method is set to movement class the movement class calculation is used to set the order quantity. The movement class (set in the warehouse/item record) is the number of months for which to supply stock. If the movement class is 7, then 7 months supply is the order quantity. The order quantity is calculated as the usage rate X movement class. If the usage rate of the item is 10, then the order quantity is set to 70 (i.e., 10 X 7).
If the order quantity method is set to EOQ the order quantity is set to the following:
If "R" cost (set in the warehouse record) is $5.00, usage rate (set previously in this program) is 20, "K" cost (set in warehouse record) is .30 (30%) and unit cost is $7.00 then the EOQ calculation is as follows:
(Rounded off to even units)
The EOQ answer may be rounded off to the nearest standard package, up to a minimum two week supply or a maximum one year’s supply, or adjusted according to the product line’s review cycle.
If the order quantity method is set to manual, the order quantity calculation is skipped.
Order point/line point, Minimum/maximum stocking
After the order quantity is set, the program sets the order point and line point if the restocking method is set to order point/line point or the minimum stock and maximum stock if the restocking method is set to min/max.
The order point is calculated as follows:
Order point = (usage rate X lead time) + safety stock
(Lead time is in months; safety stock = (usage rate X lead time) X safety allowance). If the usage rate is 20 and the lead time is 30 days and the safety allowance is 50% the order point is set to 30.
The line point is calculated as follows:
Line point = order point + usage rate during review cycle
If the order point is 30, the usage rate is 20 and the review cycle is 1-1/2 months the line point is set to 60.
The minimum stock is calculated as follows:
Minimum stock = (usage rate X lead time) + safety stock (same as order point)
If the usage rate is 20, the lead time is 30 days and the safety allowance is 50% the minimum stock is set to 30.
The maximum stock is calculated as follows:
Maximum stock = minimum stock + order quantity
If the minimum stock is set to 30 and the order quantity is 20 the maximum stock is set to 50.
The safety stock dip % is the percentage of use of the safety stock.
The safety stock = the safety allowance X usage X lead time. The system has the lowest on hand quantity stored per item for the period. If the safety stock equals 100 and the lowest on hand quantity for the period is 80, the safety stock dip percent is 20% (i.e., 20% of the safety stock was used).
Reducing number of periods to freeze controls and ignore low sales
Finally the number of periods to freeze controls and number of periods to ignore low sales is reduced by one period (if not a permanent freeze).