Users may notice some Preferred Stock Level Quantity of their items are the same with the Reorder Point.
Based on the calculation below, the Preferred Stock Level is less than the Reorder Point but since it is copying the reorder point's quantity, the Preferred Stock Level is overstated.
Formula for Preferred Stock Level (based on the Help Guide):
daily demand * preferred stock level in days)
Formula for Reorder Point (based on the Help Guide):
Without safety stock defined:
Reorder point = (average lead time days * demand)
With safety stock defined in days:
Reorder point = [(average lead time days + safety stock days) * demand]
With safety stock quantity defined:
Reorder point = [(average lead time days * demand) + safety stock quantity)
This is actually working as designed. The rules are:
1. If calculated Reorder Point > Preferred Stock Level, the Reorder Point & Preferred Stock Level will be showing the same values based on the calculated RP.
The logic here is, we do not want to stock goods at a lower quantity when our Reorder Point has a higher quantity. So in that case, the system is entering the same quantity of the Reorder Point in the Preferred Stock Level.
2. If calculated Reorder Point < Preferred Stock Level, the Reorder Point & Preferred Stock Level will show the actual calculated values & the item will show in the Order Items page, where the quantity to order is the difference of Preferred Stock Level less Reorder Point.