Set Up Order Parameters

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Set Up Order Parameters

 

Overview

This function allows the way parts are ordered to be defined. Using these parameters, the system will:

  • Order more or less stock depending on seasonality; slowly raising stocking quantities prior to the busy season, or reduce stocking quantities when entering the slow selling season. This ensures that adequate stock is on hand and that capital expenses are lowered by reducing inventories during the slower season.
  • Parameters can be assigned not only to inventory Categories, but to specific Product Codes within those categories.
  • Stock Minimum amounts based on Adjusted year’s usage history or what has been used so far this year.
  • Automatically set the Shop Popularity Codes depending on movement history.
  • Ignore Specific Shop Popularity Codes when ordering stock.
  • Order a percent of specific popularities, i.e. 100% of A’s, 75% of B’s, etc.
  • Define the Day to Switch to Next Month’s Parameters

 

Procedure

To define these parameters, go into the Inventory module.

Click the Order drop-down menu, and then click Setup Order Parameters.

Select the Category for the parameters. Next click on the Edit Percents button.

A screen will display listing all of the profiles that have been defined. Do not change the Default profile. Instead click the New button to create a new parameter.

The first screen that comes up will show percentages and the months of the year.

Give the parameter a Description so that it can be saved.

Next the seasonality percentages are entered. In order to assist in figuring seasonality percentages, and example will be used. No matter what a shop’s dollar volume is, the formula is the same. The numbers just may be larger or smaller.

Assume a shop had gross annual sales of $480,000. Divide this figure by 12 (number of months in a year), and get an average monthly sales figures of $40,000.

Next do an analysis of the actual gross sales each month. Once StockTrac® has been running for a full year, these figures will be available. Assume the sales in January were $17,000. To figure out what percent of business this represents, divide this monthly figure by the average monthly sales of $40,000, which was figured above.

$17,000 / $40,000 = .425

This figure would be rounded to .43 or 43%. This indicates that January was a slow month, as it represented only 43% of an average month’s business. Next look at August, our busiest month in this example. August had total sales of $43,000. Apply the same formula used above:

$43,000 / $40,000 = 1.075

Again round this figure to 1.08 or 108% of a normal month’s business. Using the above examples of our slowest and busiest months, a seasonality table for all of the months can be computed. This information would then be entered into the Stocking Percentages on the screen. Below is a seasonality table for this example shop.

EXAMPLE SEASONALITY TABLE
MONTH GROSS SALES SEASONALITY %
JANUARY $22000 55%
FEBRUARY $28800 72%
MARCH $32800 82%
APRIL $41200 103%
MAY $44000 110%
JUNE $58800 147%
JULY $61600 154%
AUGUST $57600 144%
SEPTEMBER $45200 113%
OCTOBER $38400 96%
NOVEMBER $32800 82%
DECEMBER $16400 41%
TOTALS $480,000 100%

Some adjustment of the seasonality may have to be done. For example, if a business takes a real jump in seasonality from one month to another, say from 82% to 103%, it may be beneficial to increase the percent of the slower month in anticipation of stocking enough for the following busy month. The same holds true for a sharp decline in seasonality. A shop owner may decide to lower the seasonality a little earlier to drop the inventory levels somewhat sooner to avoid being overstocked during the slow periods.

These seasonality %s would now be entered in the Monthly Stocking Percentage, as shown below:

The fields below the Month % pertain to ordering by Popularity Code. This allows the ordering procedure to be further refined by providing the ability to order less of fast moving items or more of slow moving items. Caution: these fields can also cause a shop to run short of fast moving items or be overstocked on slow moving items, so many shops leave them at 100%.

Next click on the tab that says Minimums. The first time here the screen will look similar to the following:

This is where the system is told how to stock. Enter numbers reflecting how many you want to stock based on past history.

The section on the left that says Minimums Adjusted Year Usage refers to an average year’s usage. NOTE: The Adjusted Year Usage on the left side of the screen can be changed to use the actual Last 12 months by clicking on the option in the center of this screen.

The section on the right that says Minimums Year To Date Usage refer to how many of those parts have been used since the beginning of the fiscal year. Fill in at least 2 of the rows (if not all 4) to increase accuracy. Below is an example of the screen will information filled in:

Parameters can be set high or low depending on how inventory is to be kept on the shelves.

Once the parameters are set, click the Save button.

Next choose Save as New.

The system will return to the Select Ordering Percentages screen, and the percentage that was just added will display. Click Done.

The Setup Order Parameters screen is displayed again. Now the profile that was created must be assigned to the category we originally selected. Click on the down-arrow to the right of the box that says Default Percentages and select the newly created percentage. To attach this profile to more categories, click on the Copy button, and copy the profile to as many categories as needed. When finished, click the OK button to close out.

Create as many parameter profiles as needed. NOTE: It is very important to assign the parameter profile to each and every category that the shop orders from.

Notice there is also a Miscellaneous tab for each category. Click it, and a screen similar to the following will display:

This information is for users who wish to use popularity codes as a guide for ordering. It can be set up to automatically alter the shop popularity codes based on usage.

It can also tell the system which popularity codes to ignore and how many days in between orders (normally this is just left at 0). There is also a MTD=Month To Date Override option (normally this is left unchecked) and an option to tell the system which day to switch to next month’s parameters (normally this is just left blank).

 

 

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