Purchase estimate process
Purchase estimates can be generated from the Stock balance table with different ordering methods depending on product sales pattern. The purchase estimates are generated by printing the Purchase estimate report.
This report generates rows to the Purchase estimate and Purchase estimate line tables based on parameters in the Stock balance table. After the rows are generated in the Purchase estimate line, they can be converted into Purchase orders.
Setup of purchase estimates
Business NXT supports three different ordering methods for generating purchase estimates:
- 0 - Order according to stock changes
- 1 - Order at ordering point
- 2 - Periodic ordering
The ordering method 0 - Order according to stock changes is ideal for products of rare purchase type, but also for products with short or secure delivery times. This is because with short or secure delivery times, there is no or little reason to set up safety stocks. It could be direct delivery to the end customer, after a shorter repackaging at the warehouse. Order changes occur over time, and there are a couple of parameters that are only useful for generating estimates with this type of ordering method. You can use a time horizon forward, and take into account Min. stock, Max. stock, and Econ. purch. qty.
The number of days stated as Lead time and Transport time for the relevant Delivery alternative are counted back. The calculation is based on the times at which the Physical stock level falls below the Min. stock level or becomes negative. If you have overruled the Lead time or Transport time in the Purchase estimate line, these values will be used in the calculation.
The ordering method 1 - Order at ordering point is excellent for most products. It keeps track of Min. stock and Max. stock. It has an additional concept: the order point. This order point, minus safety stock, is the amount that will be sold within “lead time” days. The absolute advantage of the ordering method 1 - Order at ordering point is that the order proposal can be run at any time, and as often as desired. There are no limitations regarding for example withdrawals, as there are with 2 - Periodic ordering.
The calculation of the order point is done using two different options. Option 1 only looks at the time T = 0, while option 2 also checks forward. In Business NXT, both are evaluated simultaneously. This naturally does not happen at the same time, but evaluation always takes place after BOTH principles.
The estimate will come from the highest of:
- The smallest quantity times the Econ. purch. qty at Point of purchase - Stock incl. changes to the current date (if the Stock incl. changes to the current date < the Point of purchase).
- The smallest quantity times the Econ. purch. qty at Min. stock -Stock inside lead time - Reservations outside lead time (if Stock inside lead time + Reservations outside lead time < Min. stock level).
The ordering method 2 - Periodic ordering is a method where orders are placed, for example, every fifth day. This method is typically used for products that fluctuate greatly in demand and have a limited life cycle. A printer or certain types of computers could be an example. The advantage of periodic ordering is that it can handle “under-demand”. By allowing negative order proposals, you get a warning when the product loses demand. You can choose whether or not to view negative order proposals.
The completion of Goods out since purchase estimate + Point of purchase - Stock inside lead time - Reservations outside lead time, with the current date as the purchase date will be suggested. The Stock balance row is included if at least as many days have passed as last defined in the Purchase interval field or if the field containing the last Purchase estimate date is not filled in.
Several fields need to be set for these ordering methods for the routines to work.
Settings in the Associate table
The Associate table contains parameters that are filled in automatically in the product and inventory related tables if they are filled in at the supplier.
The following fields affect purchase estimates:
| Field | Description |
|---|---|
| Adm. time | The time that it takes internally within the company to execute the order. This time depends on routines which in turn affect the ordering frequency of the product. |
| Lead time | The time it takes to produce/collect the order. This time is the time it takes INTERNALLY at the supplier to execute the order. |
| Transport time | The time it takes from the time the supplier ships the order to the time it arrives in stock. If this is to work fully, the supplier's products should have the same times - which they often do not. You can always see the transferred times as a suggestion in the product-related tables. |
Settings in the Delivery alternative table
In the Delivery alternative table are fields that are unique to each supplier of a particular product. It can be supplier-specific information about the supplier's product number etc.
The following fields affect purchase estimates:
| Field | Description |
|---|---|
| Sup. no. | The supplier defined for the current delivery alternative. If a normal supplier is not selected from the Stock balance table, the supplier from the Delivery alternative is used. |
| Purch. unit | This will be suggested (if filled) on the purchase estimate line and when generating the order, also on the order line. When looked up, the field refers to the Unit table. |
| Econ. purch. qty |
The quantity that it is economically advantageous to purchase. It is mandatory to set up Econ. purch. qty when using the ordering method 1 - Order at ordering point because Business NXT multiplies by a factor n times the Econ. purch. qty to reach stock level equal to or higher than the reorder point. |
| Production | Place a check mark in this column if a production order should be created instead of a purchase order. |
| Adm. time / Lead time / Transport time / Production time | These fields are in the Associate table and are suggested from this table when the delivery alternative is created. |
Settings in the Stock balance table
The Stock balance table contains the most important values to get correct purchase estimates (in terms of product information). The table is central because it is the "main table" in the connection to purchase estimate lines.
The following fields affect purchase estimates:
| Field | Description |
|---|---|
| Ordering method | The ordering method for generating purchase estimates |
| Purch. proc. |
Lookup in this field displays a dialog with different options how the purchase estimates should be calculated. If Please select standard supplier is selected, Business NXT will limit itself to use the post in Delivery alternative for the supplier that is specified as normal supplier in the stock balance table. If Consider expected future stock changes is selected, Business NXT will take into account planned increases and decreases based on the Stock change table. This setting is only applicable for the ordering method 0 - Order according to stock changes. |
| Econ. purch. qty |
The quantity that it is economically advantageous to purchase. If this is set up in the Delivery alternative table, it is used, otherwise the value from the Stock balance table is used. In Purch. proc. you define if Econ. purch. qty should be used in the calculation. |
| Min. stock / Max. stock |
These are important, in combination with the stock balance, for calculating the purchase estimate quantity. In Purch. proc. you define ifMin. stock and Max. stock should be used in the calculation. |
| Adm. time / Lead time / Transport time / Production time | These fields are in the Associate table and are suggested from this table when the post in the Delivery alternative table is created. Total lead time is a calculated sum of these four fields. If it is relevant to use only ONE field, it is easiest to use only Lead time. |
| Purchase interval | When using the ordering method 2 - Periodic ordering, the minimum number of days that must elapse between each periodic order is entered in the field. |
| Normal supplier |
When you enter the supplier number in this field and the supplier is listed in the Delivery alternative table, the lead time is automatically updated. In Purch. proc. you can limit yourself to always using a normal supplier when creating purchase estimates. |
| Point of purchase |
When using the ordering method 1 - Order at ordering point, this value is used as the value at which the order should be placed if Available inventory balance (Available inventory balance = Physical balance – Total (in Order) + Total (in Best within Lead Time)) falls below this point. When using the ordering method 2 - Periodic ordering, this field is used to specify a normal level of inventory that Business NXT will take into account. |
| Aggreg. level |
When using the ordering method 0 - Order according to stock changes, this field processes stock changes according to the selected interval. With setting level 3 - Total, Business NXT will process stock changes aggregated per product/warehouse regardless of time limit. |
| Rounding method |
Estimate quantities are rounded according to the selected method. The quantity before rounding is also given its own field in the purchase estimate lines. |
| Rounding | Rounding is specified in a multiple to which it should be rounded to the nearest. For example, 1 indicates that the number is to be rounded to a whole number of the multiple of 1. |
Setting up products for purchase estimates
- Open the Suppliers layout, and select the Supplier information tab.
- Update the different lead times for the suppliers, if needed.
- Open the Product layout, and select the Product information tab.
- Update the Delivery alternative fields for the products.
- Open the Purchase estimate/forecast layout, and select the Stock balances tab.
- Update the Stock balance fields for the products.
Purchase estimate report
Starting the processing
- Open the Purchase estimate/forecast layout, and select the Stock balances tab.
- Select the stock balance posts for which you want to create purchase estimate lines.
- In the context menu, select Send. The Create and send documents dialog opens.
- The default document type Purchase estimate is
already selected, as well as today's date, but you can make adjustments by
clicking on the Type icon.
Option Description Date When using the ordering method 0 - Order according to stock changes, Business NXT limits itself to estimates that must be placed before this date.
If you don't use the routine daily, the date can be set to the date that is the day before the next time you print a purchase estimate report. Then any open orders that are in the period immediately after the lead time will be captured.
- Click the Form icon to select or change the form you want to use. Make sure that the selected form is set up with 322. Purchase estimate print layout in the Print layout no. field.
- Click the Settings icon if you want to override the Ordering method, Purch. proc., Aggreg. level and Rounding method in the Stock balance table for the printout.
- Finish by clicking Send.
See also: Report forms
Generate purchase/production orders
Business NXT creates orders directly based on purchase estimate lines. Orders and production orders can also be created directly from a customer order.
Orders are created using the Generate purchase/production orders processing menu option. It is possible to either mark only lines, or to create orders for several suppliers at the same time.
Business NXT prevents creation of multiple orders from the same proposal at the same time.
When using the processing menu selection, an order is created per supplier and possibly a production order.
On the purchase order line, Business NXT populates values from the order proposal lines and retrieves information from the product table. Values are duplicated from the order header, lookups are made in the Price- and discount matrix, cost price is calculated including customs and freight cost. The purchase order is then saved and with this, amounts are calculated in the order header and on lines, and the stock balance table is updated (depending on the order type) and the order status is set.
The date fields on the order line are filled in based on the order proposal lines.
Starting the processing
- Select the Purchase estimate lines you want to process.
- In the Processing menu, select Generate purchase/production orders.
See also: Purchase gen. processing