AGR calculates the estimated stock development for every item in each location for the upcoming year.
The future stock estimation can be found in the item chart & grid and form the input to the AGR purchase plans, either towards a vendor or to the warehouse, depending on the location type.
The calculations take several order parameters into account:
Current stock levels
Undelivered orders
Total demand, which consists of:
Sales forecast
Sales orders, depending on the Sales orders setting.
Promotions and/or Sales plan, if the user has inserted values in the AGR system
Demand from other locations
Bill of Material (BOM) demand
Lead time
Order schedule or frequency
Order Coverage days
Order multiples
Minimum order quantities (MOQ)
Min stock
Note that the list above may or may not apply to your company's parameters, if for example MOQ doesn't have a value then it has no impact on the calculations.
For a purchaser, the stock estimation gives a sanity check on whether the order parameters are correctly set in the system. For example, if the system predicts a small frequent stock deliveries, it may indicate that the order schedule / coverage could be higher. Similarly, unexpected overstock predictions could highlight issues with high minimum order quantities compared to demand forecasts.