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Point of Order

Minimum amount predefined to automatically issue a Purchase Request or Production Order.

To calculate the Point of Order, the System considers the average monthly consumption, replenishment time and safety stock.

Example:

CM = Average consumption

TR = Replenishment time

ES = Safety stock

CM = 30

TR = 2 months

ES = 20

PP = (CM*TR) + ES

PP = (30*2) + 20 = 80

Economic Lot

This field establishes the ideal quantity to purchase or produce in a single operation to obtain the lowest cost:

LE = CM x PA

Where:

• • • CM = Average Consumption
    • PA = Frequency of Acquisition

The economic lot is used:

• • • When generating automatic requests for point of order,
    • To generate intermediate (child) production orders and purchase requests, that is, for products that are a part of the structure of the finished product.

Minimum Lot

Enter the minimum quantity to be produced less than the economic lot used to calculate product requirements.

Quantity per Package

Quantity of products per package. Used for products acquired.

It is the quantity less than the economic lot that is to be considered for purchase. If the requirement is less than the quantity per package, the purchase is the quantity per package.

If the amount needed is greater than the minimum lot and less than the economic lot plus the amount per package, the purchase will be the economic lot plus the amount per package. Otherwise, amount to be purchased must be multiple of the economic lot amount.

Tolerance

Tolerance of the product discrepancy in relation to the purchase order.

Tolerance is a percentage to be considered at the purchase moment, in order to minimize stock. This is applied to the economic lot to obtain the greatest and least tolerance limit.

If the requirement is between the two tolerance limits, the exact requirement is bought. If it is lower or higher, the quantity per package rule is considered.

See Also

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