Selecting Order Logic in AGR’s settings
In AGR’s order settings, users can choose between three types of order logic behavior:
standard time-based order logic
min/max
Use min/max if exists.
The order logic is set to Standard by default.
This article will explain the difference between these setting options.
1. Standard (time-based) Order Logic
This method calculates the necessary quantity to cover demand for a specific order period, aiming to order the minimum required amount.
As a result, order sizes will vary in line with upcoming demand due to seasonality or demand trends.
This dynamic approach optimally determines the quantity needed for the order period. It ensures adequate stock is maintained to meet demand while adhering to various constraints like Min stock, Order Multiples, Minimum Order Quantities (MOQs), Safety Stock, etc.
2. Min (Reorder Point)/Max Order Logic
Replenishment need is triggered when the stock level falls below the minimum stock value, replenishing up to the maximum stock level.
It directly compares current inventory and undelivered orders against the reorder point and orders up to the maximum stock level.
However, this approach can lead to over or understocking, as the unit quantity of a min and max level is fixed and doesn’t adapt to changing sales patterns.
It's important to note that:
after going below the reorder point (min stock), stock might deplete before the next order arrives, if sales are trending up.
always ordering up to the max stock might leave you overstocked for weeks or months, if sales have dropped since the max level was set.
3. Use Min (Reorder Point)/Max if exists
Only items that have both Min stock (Re-order point) and Max stock levels filled out will get the min /max order logic. If an item has only min or max, but not both, the standard order logic will be applied instead.
Setting Min (Reorder Point) and Max values in AGR
You can define Reorder Points and Maximum Stock through the following methods:
Individually: Set values directly in the Item Card.
Bulk Update: Use the Bulk Update feature to set values for multiple items simultaneously.
By understanding and correctly applying these order logic settings, you can ensure efficient inventory management and maintain optimal stock levels.