Setting parameters for purchase order suggestions can seem to be complicated. These examples will help you to decide which order method to use and how to set specific parameters to get the best possible purchase order suggestions.
Examples for order methods:
Examples for parameters:
On Demand scenarios and examples
Scenario 1
In this simple scenario, we will see how pixi calculates purchase order suggestions according to On Demand method for an item that is in stock on location 001. There are also open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment.
Additional information for this item:
Physical stock = 1
Open customer orders on status HAL with payment type prepayment = 1
Open customer orders on status HAL with other payment types = 2
Minimum order quantity = 6
Packing unit = 6
There are no open purchase orders for this item.
There is only one supplier assigned to this item.
The item reached the reorder level.
These parameters are relevant for this scenario and were selected in the Purchase Order Suggestions wizard:
-
Purchasing conditions:
Apply packing units
Apply minimum order quantity
Calculation by pixi:
Available stock = Physical stock - Open customer orders = 1 - 3 = -2
Open customer orders for purchase order suggestions = 2
Open purchase orders = 0
Required Q = open customer orders - physical stock - open purchase orders = 2 - 1 - 0 = 1
Suggested order Q = 6 (because of minimum order quantity)
Based on this example pixi suggests to order Q=6 of this item from the available supplier.
Scenario 2
In the second, more complex scenario, we will see how pixi calculates purchase order suggestions according to On Demand method for an item that is in stock on location 001 and location 002. There are also open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment. In the two examples, we will see the difference between Calculate suggestions for each location separately and Summarize selected locations and calculate suggestions.
Additional information for this item:
Physical stock on location 001 = 1
Physical stock on location 002 = 2
Open customer orders on status HAL with payment type prepayment on location 001 = 1
Open customer orders on status HAL with other payment types on location 001 = 5
There are no open purchase orders for this item.
There is only one supplier assigned to this item.
The item reached the reorder level.
Location |
Physical Stock |
Open Customer Orders |
Available Stock |
Open Customer Orders for Purchase Order Suggestions |
Open Purchase Orders |
001 |
1 |
6 |
-5 |
5 |
0 |
002 |
2 |
0 |
2 |
0 |
0 |
SUM |
3 |
6 |
-3 |
5 |
0 |
Example 1
These parameters are relevant for this scenario and were selected in the Purchase Order Suggestions wizard:
-
Locations:
Selected locations: 001, 002
Summarize selected locations and calculate suggestions.
Order location: 001
Calculation by pixi:
Required Q = Open customer orders for purchase order suggestions(Sum) - Physical stock(Sum) - Open supplier orders(Sum) = 5 - 3 - 0 = 2
-
Suggested order Q = 2
Since Summarize selected locations and calculate suggestions parameter was selected, pixi expects that available stock from location 002 will be used to ship open customer orders on location 001.
Based on this example, pixi suggests to order Q=2 of this item from a supplier for order location 001.
Example 2
Let's check how the calculation changes if we select Calculate suggestions for each location separately:
Required Q for location 001 = 5 - 1 - 0 = 4
Required Q for location 002 = 0
Suggested order Q = 4
Since Calculate suggestions for each location separately parameter was selected, pixi expects that available stock from 002 can't be moved to 001.
Based on this example pixi suggests to order Q = 4 of this item from a supplier for location 001. Suggested quantity is higher because suggestions were calculated for each location separately.
Target Stock scenarios and examples
Scenario 1
In this scenario, we will see how pixi calculates purchase order suggestions according to the Target Stock method for an item that is in stock on location 001 and location 002. There are open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment. We want to get suggestions for each location separately.
Additional information for this item:
Physical stock on location 001 = 13
Physical stock on location 002 = 10
Open customer orders on status HAL with payment type prepayment on location 001 = 1
Open customer orders on status HAL with other payment types on location 001 = 2
There are no open purchase orders for this item.
There is only one supplier assigned to this item.
Location |
Physical Stock |
Available Stock for Purchase Order Suggestions |
Reorder Level |
Target Stock |
Open Purchase Orders |
Open Customer Orders for Purchase Order Suggestions |
Open Customer Orders |
001 Pick Location |
13 |
11 |
20 |
30 |
0 |
2 |
3 |
002 POS Location |
10 |
10 |
5 |
10 |
0 |
0 |
0 |
SUM |
23 |
21 |
25 |
40 |
0 |
2 |
3 |
These parameters are relevant for this scenario and were selected in the Purchase Order Suggestions wizard:
-
Locations:
Selected locations: 001, 002
Calculate suggestions for each location separately.
Order location: 001
Calculation by pixi:
-
If available stock is smaller(or equal) as reorder level calculations will be performed:
Location 001: 11 < 20: Yes
Location 002: 10 > 5: Available stock is bigger than reorder level. Don't calculate suggestions.
Required Q for location 001 = Target Stock - (Physical stock - Open customer orders for purchase order suggestions + open supplier orders) = 30 - (13 - 2 + 0) = 19
Required Q for location 002 = 0
Suggested order Q = 19
Since Calculate suggestions for each location separately parameter was selected, pixi expects that available stock from 002 can't be moved to 001.
Based on this example pixi suggests to order Q=19 of this item from a supplier for location 001. Suggested quantity is higher because suggestions were calculated for each location separately.
Scenario 2
In this scenario we will see how pixi calculates purchase order suggestions according to Target Stock method for an item that is in stock on location 001 and location 002. There are open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment. We want to get suggestions for each location separately.
Additional information for this item:
Physical stock on location 001 = 13
Physical stock on location 002 = 3
Open customer orders on status HAL with payment type prepayment on location 001 = 1
Open customer orders on status HAL with other payment types on location 001 = 2
There are no open purchase orders for this item.
Packing unit = 6
There is only one supplier available for this item.
These parameters are relevant for this scenario and were selected in the Purchase Order Suggestions wizard:
-
Locations:
Selected locations: 001, 002
Calculate suggestions for each location separately.
Order location: 001
-
Purchasing conditions
Apply minimum order quantity.
Location |
Physical Stock |
Available Stock for Purchase Order Suggestions |
Reorder Level |
Target Stock |
Open Purchase Orders |
Open Customer Orders for Purchase Order Suggestions |
Open Customer Orders |
001 Pick Location |
13 |
11 |
20 |
30 |
0 |
2 |
3 |
002 POS Location |
3 |
3 |
5 |
10 |
0 |
0 |
0 |
SUM |
16 |
14 |
25 |
40 |
0 |
2 |
3 |
Calculation by pixi:
-
If available stock is smaller (or equal) as reorder level calculations will be performed:
Location 001: 11 < 20: Yes
Location 002: 3 < 5: Yes
Required Q for location 001 = Target Stock - (Physical stock - Open customer orders for purchase order suggestions + open supplier orders) = 30 - (13 - 2 + 0) = 19
Required Q for location 002 = 10 - (3 - 0 + 0) = 7
Suggested order Q = 19 + 7 + 4 (added to reach packing units) = 30
Additional quantity (4) that was added because of the packing units is suggested for location 001 (order location parameter).
Since Calculate suggestions for each location separately parameter was selected, pixi expects that available stock from 002 can't be moved to 001.
Based on this example pixi suggests to order Q=23 of this item from a supplier for location 001 and Q=7 for location 002.
Scenario 3
In this scenario we will see how pixi calculates purchase order suggestions for location 002 according to Target Stock method for an item that is in stock on location 001 and location 002. There are open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment. We want to get suggestions for each location separately.
Additional information for this item:
Physical stock on location 001 = 12
Physical stock on location 002 = 5
Open customer orders on status HAL with other payment types on location 001 = 2
There are no open purchase orders for this item.
There is only one supplier assigned to this item.
Packing unit = 12
These parameters are relevant for this scenario and were selected in the Purchase Order Suggestions wizard:
-
Locations:
Selected locations: 002
Calculate suggestions for each location separately.
Order location: 002
-
Purchasing conditions
Apply packing units.
Location |
Physical Stock |
Available Stock for Purchase Order Suggestions |
Reorder Level |
Target Stock |
Open Purchase Orders |
Open Customer Orders for Purchase Order Suggestions |
Open Customer Orders |
001 Pick Location |
12 |
10 |
20 |
30 |
0 |
2 |
2 |
002 POS Location |
5 |
5 |
10 |
15 |
0 |
0 |
0 |
SUM |
17 |
15 |
30 |
45 |
0 |
2 |
2 |
Calculation by pixi:
-
If available stock is smaller (or equal) as reorder level calculations will be performed:
Location 001: 10 < 20: Yes.
Location 002: 5 < 10: Yes.
Required Q for location 002 = Target Stock - (Physical stock - Open customer orders for purchase order suggestions + open supplier orders) = 15 - (5 - 0 + 0) = 10
Suggested order Q for 002 = 10 + 2 (added to reach packing units) = 12
Based on this example pixi suggests to order Q=12 of this item from a supplier for location 002.
Scenario 4
In this scenario, we will see how pixi calculates purchase order suggestions according to the Target Stock method for an item that is in stock on location 001 and location 002. There are open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment. In the two examples, we will see the difference between Calculate suggestions for each location separately and Summarize selected locations and calculate suggestions.
Additional information for this item:
Physical stock on location 001 = 3
Physical stock on location 002 = 30
Open customer orders on status HAL with payment type prepayment on location 001 = 1
Open customer orders on status HAL with other payment types on location 001 = 2
There are no open purchase orders for this item.
There is only one supplier assigned to this item.
Packing unit = 6
Location |
Physical Stock |
Available Stock for Purchase Order Suggestions |
Reorder Level |
Target Stock |
Open Purchase Orders |
Open Customer Orders for Purchase Order Suggestions |
Open Customer Orders |
001 Pick Location |
3 |
1 |
20 |
30 |
0 |
2 |
3 |
002 POS Location |
30 |
30 |
5 |
50 |
0 |
0 |
0 |
SUM |
33 |
31 |
25 |
80 |
0 |
2 |
3 |
Example 1
These parameters are relevant for this example and were selected in the Purchase Order Suggestions wizard:
-
Locations:
Selected locations: 001, 002
Calculate suggestions for each location separately.
Order location: 001
-
Purchasing conditions
Apply packing unit.
Calculation by pixi:
-
If available stock is smaller (or equal) as reorder level, calculations will be performed:
Location 001: 1 < 20: Yes, calculate suggestions.
Location 002: 30 > 5: No.
Required Q for location 001 = Target Stock - (Physical stock - Open customer orders for purchase order suggestions + open supplier orders) = 30 - (3 - 2 + 0) = 29
Suggested order Q for 001 = 29 + 1 (added to reach packing units) = 30
Based on this example pixi suggests to order Q=30 of this item from a supplier for location 001.
Example 2
Parameter that is different then in example 1:
-
Locations:
Summarize selected locations and calculate suggestions.
Calculation by pixi:
-
If available stock is smaller (or equal) as reorder level, calculations will be performed. In this case available stock and reorder level from both locations are summarized and then compared:
Both locations: (1 + 30) > (20 + 5): Available stock is bigger than reorder level. Don't calculate suggestions.
Based on this example pixi doesn't suggests to order this item.
Stock Turnover scenarios and examples
Scenario 1
In this scenario we will see how pixi calculates purchase order suggestions according to Stock Turnover method for an item that is in stock on location 001 and location 002. There are open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment. Supplier delivers this item in three days.
Additional information for this item:
Physical stock on location 001 = 13
Physical stock on location 002 = 10
Open customer orders on status HAL with payment type prepayment on location 001 = 1
Open customer orders on status HAL with other payment types on location 001 = 2
There are no open purchase orders for this item.
There is only one supplier assigned to this item.
Supplier delivery time: 3 days
These parameters are relevant for this example and were selected in the Purchase Order Suggestions wizard:
-
Locations:
Selected locations: 001, 002
Calculate suggestions for each location separately.
Order location: 001
-
Stock turnover:
Order for stock turnover in days = 10
Sales per day from/to is set.
Location |
Physical Stock |
Available Stock for Purchase Order Suggestions |
Reorder Level |
Safety Stock |
Open Purchase Orders |
Open Customer Orders for Purchase Order Suggestions |
Open Customer Orders |
001 Pick Location 1 |
13 |
11 |
20 |
30 |
0 |
2 |
3 |
002 Pick Location 2 |
10 |
10 |
5 |
10 |
0 |
0 |
0 |
SUM |
23 |
21 |
25 |
40 |
0 |
2 |
3 |
Calculation by pixi:
-
Sales per day is calculated from the Sales per day from/to date range:
Location 001: 2
Location 002: 0
-
If available stock is smaller (or equal) as reorder level, calculations will be performed:
Location 001: 11 < 20: Yes
Location 002: 10 > 5: Available stock is equal bigger than reorder level. Don't calculate suggestions.
Required Q for location 001 = (Stock Turnover * Sales Per Day) - (Open Purchase Orders + Physical stock - Open Customer Orders for Purchase Order Suggestions) + (Delivery Time * Sales Per Day) = (10 * 2) - (0 + 13 - 2) + (3 * 2) = 20 - 11 + 6 = 15
Suggested order Q for 001 = 15
Based on this example pixi suggests to order Q=15 of this item from the supplier for location 001.
Scenario 2
In this scenario we will see how pixi calculates purchase order suggestions according to Stock Turnover method for an item that is in stock on location 001, location 002 and location 003. There are open customer orders on location 001 for this item. Auto Order When On Hold is selected for all payment types except prepayment. In the two examples we will see the difference between Calculate suggestions for each location separately and Summarize selected locations and calculate suggestions.
Additional information for this item:
Physical stock on location 001 = 2
Physical stock on location 002 = 30
Physical stock on location 003 = 1
Open customer orders on status HAL with payment type prepayment on location 001 = 1
Open customer orders on status HAL with other payment types on location 001 = 2
There are no open purchase orders for this item.
There is only one supplier assigned to this item.
Supplier delivery time: 3 days
Location |
Physical Stock |
Available Stock for Purchase Order Suggestions |
Reorder Level |
Safety Stock |
Open Purchase Orders |
Open Customer Orders for Purchase Order Suggestions |
Open Customer Orders |
001 Pick Location |
2 |
0 |
10 |
2 |
0 |
2 |
3 |
002 Refill Location |
30 |
30 |
20 |
5 |
0 |
0 |
0 |
003 POS Location |
1 |
1 |
10 |
2 |
0 |
0 |
0 |
SUM |
33 |
31 |
40 |
9 |
0 |
2 |
3 |
Example 1
In this example we have selected Calculate suggestions for each location separately location parameter.
These parameters are relevant for this example and were selected in the Purchase Order Suggestions wizard:
-
Locations:
Selected locations: 001, 002, 003
Calculate suggestions for each location separately.
Order location: 001
-
Stock turnover:
Order for stock turnover in days = 10
Sales per day from/to is set.
Calculation by pixi:
-
Sales per day is calculated from the Sales per day from/to date range:
Location 001: 2
Location 002: 0
Location 003: 3
-
If available stock is smaller (or equal) as reorder level, calculations will be performed:
Location 001: 0 < 10: Yes
Location 002: 30 > 20: Available stock is bigger than reorder level. Don't calculate suggestions.
Location 003: 1 < 10: Yes
Required Q for location 001 = (Stock Turnover * Sales Per Day) - (Open Purchase Orders + Physical stock - Open Customer Orders for Purchase Order Suggestions) + (Delivery Time * Sales Per Day) = (10 * 2) - (0 + 2 - 2) + (3 * 2) = 20 - 0 + 6 = 26
Required Q for location 003 = (10 * 3) - (0 + 1 - 0) + (3 * 3) = 30 - 1 + 9 = 38
Suggested order Q for 001 = 26
Suggested order Q for 003 = 38
Based on this example pixi suggests to order Q=26 of this item from the supplier for location 001 and Q=38 for location 003.
Example 2
Parameter that is different then in example 1:
-
Locations:
Summarize selected locations and calculate suggestions.
Calculation by pixi:
-
Sales per day is calculated from the Sales per day from/to date range:
Location 001: 2
Location 002: 0
Location 003: 3
Sum of sales per day: 5
-
If sum of available stock is smaller (or equal) than sum of reorder level, calculations will be performed:
(0 + 30 + 1) < 40: Yes
Required Q = (Stock Turnover * Sum Sales Per Day) - (Sum Open Purchase Orders + Sum Physical stock - Sum Open Customer Orders for Purchase Order Suggestions) + (Delivery Time * Sum Sales Per Day) = (10 * 5) - (0 + 33 - 2) + (3 * 5) = 50 - 31 + 15= 34
Suggested order Q = 34
Based on this example pixi suggests to order Q=34 of this item from the supplier for order location 001.
Supplier parameters - scenarios and examples
When should I select Order only if selected supplier has higher priority than all available suppliers (not only selected)?
You should select this parameter if:
Items are not urgently needed and you can wait for the delivery from the optimal supplier.
You are working in a bigger purchasing department and you are responsible for suppliers A and B, and your colleague is responsible for suppliers C and D. When you create purchase order suggestions for suppliers A and B you also select the option Order only if selected supplier has higher priority than all available suppliers (not only selected) because you want to create optimal suggestions. Your colleagues does the same for suppliers C and D. Both of you can be sure that you will order items under best possible conditions and at the right supplier.
You shouldn't select this parameter if:
You need to urgently get items for open customer orders and you know that there is one supplier that will deliver them immediately, for example on Friday afternoon.
Scenario for suppliers
An item has four suppliers A, B, C, D. Supplier A was the last to deliver this item, supplier B has the lowest price for this item, supplier C delivers faster than others and supplier D is just another supplier for this item.
Example 1
In the Purchase Order Suggestions wizard you select the following supplier options:
Selected suppliers: A and B
Order from supplier with: Lowest price
Wizard result: Supplier order with this item is created for supplier B. Wizard checked suppliers A and B and identified that supplier B offers a lower price for this item.
Example 2
In the Purchase Order Suggestions wizard you select the following supplier options:
Selected suppliers: A and B
Order from supplier with: Fastest delivery
Order only if selected supplier has higher priority than all available suppliers (not only selected) is selected.
Wizard result: Supplier order for this item is not created. Wizard checked all suppliers for this item (not only selected) and identified that supplier C delivers this item faster than others. Since supplier C was not selected in the wizard, purchase order for this item was not created.
See also: Supplier priority in Purchase Order Suggestions
Locations parameters - scenarios and examples
What is the difference if I select Calculate suggestions for each location separately or Calculate suggestions based on summarized parameters for selected locations?
Scenario for locations
An item is in stock on location 001 and location 002. There are open customer orders for this item on both locations. Order location is 001. Packing unit for this item is 5 (Apply packing units is selected).
Location |
Physical Stock |
Open customer orders |
Location 001 |
10 |
6 |
Location 002 |
2 |
8 |
SUM |
12 |
14 |
If you select Calculate suggestions for each location separately:
First, required stock is calculated for each location. Required item quantity for location 001 is 0, required item quantity for location 002 is 6.
-
Total required quantity: 0 + 6 = 6
Total required quantity is increased to 10 because of the packing unit.
Suggested purchase order has one order line for multiple locations with item quantity 10 (4 for location 001, which is the order location, and 6 for location 002).
If you select Summarize selected locations and calculate suggestions:
First, physical stock is summarized for both locations (12) and open customer orders are summarized for both locations (14).
-
Total required quantity: 14-12 = 2
Total required quantity is increased to 5 because of the packing unit.
Suggested purchase order has one order line for location 001 (order location) with item quantity 5.