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| other_stuff:virtual_stores [2025/08/10 23:26] – [Threshold for overstock] Mark Glover | other_stuff:virtual_stores [2025/08/10 23:33] (current) – [Threshold for understock] Mark Glover |
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| The months of stock of an item for it to be considered as overstocked. In most real-life situations, the volume of storage available is limited and the Threshold for overstock can assist in managing storage space by preventing space being unnecessarily occupied. An alert is triggered for an item if the total quantity in stock (including all stock lines) divided by the AMC of the item (calculated using the last 12 months' usage in the current store) is greater than or equal to this threshold number. The default is 6 months.<WRAP center round tip> | The months of stock of an item for it to be considered as overstocked. In most real-life situations, the volume of storage available is limited and the Threshold for overstock can assist in managing storage space by preventing space being unnecessarily occupied. An alert is triggered for an item if the total quantity in stock (including all stock lines) divided by the AMC of the item (calculated using the last 12 months' usage in the current store) is greater than or equal to this threshold number. The default is 6 months.<WRAP center round tip> |
| Clearly, the Threshold for overstock must be more than the Threshold for understock. The default Threshold for overstock value of 6 may be suitable for a store with a 1-monthly order cycle. For a central store with an annual order cycle, then this figure should probably be set to <wrap em>no less than 36</wrap> | Clearly, the Threshold for overstock must be more than the [[other_stuff:virtual_stores#threshold_for_understock|Threshold for understock]]. The default Threshold for overstock value of 6 may be suitable for a store with a 1-monthly order cycle. For a central store with an annual order cycle, then this figure should probably be set to <wrap em>no less than 36</wrap> |
| </WRAP> | </WRAP> |
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| == Threshold for understock == | == Threshold for understock == |
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| Also called <wrap em>Buffer stock</wrap>, this is the number of months of stock that an item must have less of, to be considered understocked i.e. in danger of not having enough to meet demand. An alert is triggered for an item is the total quantity in stock(including all batches) divided by the average monthly consumption of the item (calculated using the last 12 months' usage in the current store) is less than or equal to this threshold number. The default is 3 months.<WRAP center round tip> | Also called <wrap em>Buffer stock</wrap>, this is the number of months of stock that an item must have less of, to be considered understocked i.e. in danger of not having enough to meet demand. An alert is triggered for an item is the total quantity in stock (including all stock lines) divided by the AMC of the item (calculated using the last 12 months' usage in the current store) is less than or equal to this threshold number. The default is 3 months.<WRAP center round tip> |
| This alert should only be triggered when your stock levels fall below your buffer stock levels. Based on the formula developed in [[purchasing:ordering_from_suppliers#calculate_required_stock_quantity|Calculating the required stock quantity]], <wrap em>Buffer stock (months) = 2 x Ordering cycle</wrap>. The default value of 3 is suitable for a store with a 6-weekly order cycle. For a central store with an annual order cycle, then this figure should be set to <wrap em>24</wrap>. That is a lot of space for a national store with several thousand items :-/ | This alert should only be triggered when your stock levels fall below your buffer stock levels. Based on the formula developed in [[purchasing:ordering_from_suppliers#calculate_required_stock_quantity|Calculating the required stock quantity]], <wrap em>Buffer stock (months) = 2 x Ordering cycle</wrap>. The default value of 3 is suitable for a store with a monthly order cycle. For a central store with an annual order cycle, then this figure should be set to <wrap em>24</wrap>. That is a lot of space for a national store with several thousand items :-/ |
| </WRAP> | </WRAP> |
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