Evaluating Inventory Supply

Evaluating Inventory Supply

Inventory supply levels must be evaluated in order to plan for item replenishment. Replenishment planning is essential to satisfying customer needs for stock items in a timely manner. Warehouse managers must evaluate inventory supply frequently to ensure that items are reordered when necessary. The NCAS provides various item balances, inquiry screens and reports to assist with inventory evaluation.

Understanding System-Maintained Item Balances

The Inventory module automatically updates and maintains item balances for each item in your warehouse. The NCAS adjusts these balances when inventory activity, including internal and external replenishment, is recorded in the system. These inventory balances can be used to evaluate current inventory order levels and supply levels for your warehouse.

The following inventory balances are maintained by the Inventory module for each item in your warehouse:

1.	The on-hand balance is the quantity of active inventory stored at a specific warehouse. Active inventory is defined as the usable amount of an item that is in the warehouse. Inventory is active if it is not damaged, expired or being inspected. The on-hand balance includes inventory that has been allocated, or set aside, for an order but has not yet been shipped.
2.	The non-active quantity is the unusable quantity of an item at a warehouse. Items are considered unusable if they are damaged, expired, or being inspected. Non-active inventory cannot be allocated to orders and is not included as part of the on-hand balance.
3.	The on-order quantity is the amount of an item that a specific warehouse has ordered from an internal or external replenishment source. When an item is received at the warehouse, the on-hand balance increases and the on-order quantity decreases.
4.	The allocated quantity is the quantity of an item that has been designated to customer orders at a specific warehouse but has not yet been gathered and shipped.
5.	The available quantity is the quantity of an item that is available to be allocated to orders. This quantity is the difference between the on-hand and the allocated quantities. The relationship between on-hand allocated and available is shown by the following formula: Available Quantity = On-hand Quantity - Allocated Quantity
6.	The released requirements balance is the total quantity of an item at a specific warehouse committed to released orders. Released orders are online requests for items that have been released, or submitted, to that warehouse. Not all released requirements have inventory allocated to them because the released requirements may exceed the amount of inventory physically available. If the released requirements quantity is greater than the allocated quantity, customers have backordered items from the warehouse. Released Requirements - Allocated Quantity = Backorders
7.	The available-to-release quantity is the difference between the on-hand quantity and the released requirements. This is the balance that the NCAS checks to ensure that there is sufficient inventory to meet order requirements. If there is not, the Inventory module will issue a warning at the time the order is placed. Because the released requirement quantity includes backordered items, the available-to-release quantity may be negative. Available-to-Release = On-hand -- Released Quantity Quantity Requirements
8.	The total requirements quantity is the total quantity of items needed to fill all released, unreleased and allocated orders for an item at a specific warehouse.
9.	The quantity due is the quantity of an item due to a specific warehouse from an external vendor.

All item balances are expressed in the inventory item’s defined stock-keeping unit (SKU).

Inquiry Screens

The Inventory module provides various inquiry screens to assist with inventory evaluation. There are three inquiry screens that display the preceding item balances:

The Stock Status (SS) screen allows a warehouse manager to view data for one item across all warehouses. This data includes the on-hand balance, allocated quantity, available quantity and non-active quantity.
The Find Inventory By Item (FII) screen also displays data for a single item across all warehouses. It contains information similar to that on the Stock Status (SS) screen, making the two screens frequently interchangeable.
The Item Warehouse Inquiry (IWI) screen gives detailed information about a specific item at a specific warehouse. It includes information, such as order quantity, that can assist a warehouse manager in reordering the item.

Reports

The following reports also help inventory managers to evaluate inventory supply:

The Replenishment Action Report (RRACT) shows the items within a specific warehouse that have reached their order points and need to be replenished. The report includes items that are controlled by the min/max, order point and computed order point methods. A Replenishment Action Report (RRACT) for each warehouse is automatically generated daily by the NCAS.

This report is located in RMDS in the report group IN 260-3. The report ID is RRACT.

The Inventory Valuation Detail by Warehouse Report (WHSEVALU) gives the on-hand balance and the average cost for each item at a particular warehouse. Items on this report are listed numerically; therefore, you must know the item number of the item you wish to locate. This report enables a warehouse manager to get a general idea of the items that are available at other warehouses.

This report is located in RMDS in the report group IN285-3. The report ID is WHSEVALU.

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