Inventory Requisitioning

Inventory Requisitioning

Overall, inventory requisitioning is almost identical to normal requisitioning; however, there are a few slight differences. This section will highlight those differences and note other key aspects of inventory requisitioning.

Use of the WAREHOUSE Field

The major difference between regular requisitioning and inventory requisitioning involves the use of the WAREHOUSE field on the Requisition Line (RQ1) screen. For inventory requisitioning, your warehouse’s ID must be entered in the WAREHOUSE field on the Requisition Line (RQ1) screen before defaults are displayed. Once you display the defaults, the following field information appears:

The appropriate accounting distribution will default to the GL COMPANY, GL ACCOUNT and GL CENTER fields. This is the account to which the purchase of the item must be charged.
The ship-to code assigned to the warehouse when it was established on the Warehouse Area Entry (WHAE) screen will default to the SHIP TO CODE field. This code designates the location to which the inventory will be shipped.

Note: The ship-to code default is a unique feature of inventory requisitioning. This default will never occur in regular requisitioning. If a ship-to code is not designated when a warehouse is established, a ship-to code can be added to a warehouse using the Warehouse Area Update (WHAU) screen.

It is extremely important that you enter the warehouse ID in the WAREHOUSE field before displaying defaults on the inventory requisition. Otherwise, accounting and shipping errors may occur.

If you manage multiple warehouses, you can create one inventory requisition to include multiple warehouses. Each line on the Requisition Line (RQ1) screen can be designated to a different warehouse by typing that warehouse’s ID in the WAREHOUSE field for that line.

Note: Always enter your warehouse ID in the warehouse field before displaying defaults on the Requisition Line (RQ1) screen to ensure that the correct accounting distribution and ship-to code default to the screen. If you forget to enter the warehouse ID in the warehouse field before displaying defaults, you must delete the company, account and center that default. Then, you must enter the warehouse ID in the warehouse field and display the defaults again to access the correct accounting distribution.

Ordering Inventory In Stock-Keeping Units (SKUs)

All inventory items must be requisitioned in the correct stock-keeping unit (SKU). Recall from the Establishing Item Information section of this course that a stock-keeping unit is the smallest unit of measure applied to an item when it is issued from or returned to a warehouse. This may not always be the same unit in which your warehouse stocks the item; however, you still must use the SKU assigned to the item by the NCAS when creating an inventory requisition.

For example, pencils may physically be stocked in packs of a dozen, but they have an SKU of each. Therefore, when creating an inventory requisition, you must order pencils by the each even though you may stock them by the pack. (Note that you will normally order the number of pencils that make up an even pack to simplify ordering efforts.)

Funds Exceptions

Since an external replenishment transaction involves purchasing items not already owned by the agency, adequate funds must be available to pay for the purchase. The NCAS automatically checks for available funds at the time the requisition is created. If funds are not available, a funds exception will occur.

You will receive a warning message on the Requisition Line (RQ1) screen when a funds exception occurs. You then have four options:

1.	Reduce the quantity of the item ordered until there is enough money available to pay for the order. You can check the Available Funds Inquiry (161) screen in the Budgetary Control module to determine the amount of funding available. To access the account, you will need to note the company, account and center that appear on the Requisition Line (RQ1) screen when defaults are displayed.
2.	Place the requisition line on hold. The hold status allows you to keep the requisition line in the NCAS until the appropriate funds can be transferred to cover the items needed. You may be able to transfer funds yourself, or someone else within your agency may have to do it for you. If someone else within your agency must transfer the funds for you, it is still your responsibility to contact that person to transfer the funds and to verify that they have done so. Once the funds are transferred, you can lift the hold, and the requisition can be sent for approval. A requisition line can only be placed on hold at the time of creation. Note: An inventory requisition cannot be "nexted", or sent for approval, until all holds are lifted.
3.	Pass the requisition line to the Budgetary Control Exception Queue (BCQ) for special approval by the budget officer. The budget officer has three options: Approve the requisition despite the funds exception. Transfer funds to cover the shortage. Reject the requisition. The inventory requisition should still be “nexted” at the time of creation so it can begin the approval process once the line is approved by the BCQ.
4.	Delete the requisition line.

Once you handle the funds exception in one of these four ways, you may continue adding lines to your inventory requisition.

Minimum and Maximum Exceptions

Recall from the Establishing Item Information section of this course that a minimum/maximum (min/max) control can be selected to define inventory standards and limit reorder quantities. When this control is selected, two types of exceptions can occur: a minimum exception and a maximum exception.

A minimum exception occurs when the inventory level drops to or below the order point. Inventory level is determined by adding the on-hand and on-order balances and subtracting that quantity from the total requirements balance. Recall from the Evaluating Inventory Supply section that the total requirements balance represents the amount of inventory needed to fill all open orders for an item at a certain warehouse at a given time.

Inventory Level = Total Requirements - (On-hand Qty.+ On-order Qty.)

When the inventory level for an item falls below the order point, a minimum exception occurs and that item appears on the Replenishment Action Report (RRACT). This report notifies warehouse managers that it is time to replenish the item.

Note: The Replenishment Action Report is located in RMDS in the report group IN 260-3. The report ID is RRACT.

A maximum exception occurs when you try to order more of an item than your warehouse is allowed to have. The allowable level of inventory is called the inventory standard and is established on the Item Warehouse Entry (IWE) screen. If the quantity of the item you are attempting to order causes the inventory level to rise above the inventory standard, you will receive a warning message on the Requisition Line (RQ1) screen. When this occurs, you have three options:

1.	Ignore the maximum exception and continue the order. If you ignore the maximum exception, the NCAS automatically adds an additional approver. The sole purpose of this approver is to approve the maximum exception. Recall that the special warehouse approver is designated on the Warehouse Area Entry (WHAE) screen.
2.	Reduce the quantity of the item ordered until it no longer exceeds the maximum allowable quantity.
3.	Delete the requisition line.

Note: If you reduce the quantity ordered so that is is less than or equal to the quantity suggested for the item on the Replenishment Action Report (RRACT), the maximum exception should disappear.

Once you have handled the maximum exception in one of these two ways, you can continue adding inventory requisition lines.

Note: When the min/max, order point or computed order point control is selected for an item at a specific warehouse, the warehouse manager has the option of using the auto-requisitioning feature. The auto-requisitioning function instructs the NCAS to automatically create a requisition for an item when the item's inventory level drops to or below the order point. The quantity ordered on such a requisition will bring inventory levels back up to the inventory standard. Items that have been automatically requisitioned appear on the Replenishment Action Report with a "requisition created" status. Auto-requisitioning can be selected at the Item/warehouse level on the Item Warehouse Entry (IWE) or Item Warehouse Update (IWU) screens.

Auto-requisitioning can be helpful to warehouse managers in generating requisitions for items that frequently need replenishment. However, the function can also prevent warehouse managers from allowing seasonal items to drop to lower levels or from considering budget status when reordering items.

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