Inventory Costs

The inventory costs are calculated for each period of the planning calibration. They are the basis for calculating the reorder quantities.

By clicking on action “Inventory costs”

Figure 1: Inventory costs

you enter the following window:

Figure 2: Inventory costs - View

You will find the same action in the period lines. This allows you to view the inventory costs per period.

Detailed Ordering Costs

You have the possibility to set up detailed ordering costs. To do so, go to the demandPlus+ Setup and choose “Detailed Ordering Costs”:

Figure 3: Detailed Ordering Costs

You can store detailed ordering costs for a time interval and a minimum order amount. These values are taken into account when calculating the inventory costs.

Figure 4: Detailed Ordering Costs - Example

Inventory Costs

The costs are sorted in descending order of total costs. All combinations are calculated for all item vendors. The optimal order quantity is the quantity that causes the lowest total costs. (Disregarding the vendor)

Direct Unit Cost

Specifies the direct unit cost for this order quantity.

Inventory Costs

Total inventory costs of the ordering quantity in the warehouse.

Calculation

Inventory Costs = (A * B * C) / 360 A = Direct Unit Cost * Purchase Quantity/ 2 => Ø-Stock value B = Stock Keeping Expense Ratio from demandPlus+ setup / 100% C = Stock Range (Calendar Days) Note: “Safety Stock Qty.” is ignored because it is not relevant for the calculation of Order Quantity.

Item No.

Indicates the number of the item, according to the defined number series.

No. of Orders

Number of orders that will be created in the planning period

Ordering Costs

Processing costs of the orders.

Calculation

No. of orders * Ordering costs from the setup table.

Purchase Quantity

Calculated quantity for this order combination.

Calculation

All possible combinations (Order Multiple) are taken into account so that the requirements for this period are covered.

Stock Range (Calendar Days)

Indicates the stock range in calendar days.

Calculation

(No. of Orders * Purchase Quantity) / Average Usage per Calendar Day

Stock Range (Workdays)

Indicates the stock range in working days.

Calculation

(No. of Orders * Purchase Quantity) / Average Usage per Working Day

Total Costs

Indicates the total cost of the order combination, based on the number of calendar days.

Calculation

Total cost = (A / B) * C A = Total Costs Stock Range B = Stock Range (Calendar Days) C = Calendar Days

Total Costs Stock Range

Indicates the sum of order costs and inventory costs.

Calculation

Order Costs + Inventory Costs

Variant Code

Specifies the variant of the item.

Vendor Name

Specifies the name of the vendor who delivers this item by default.

Vendor No.

Specifies the code of the vendor who delivers this item by default.

If you want to transfer a different Order Quantity to the Planning Calibration, you can use the action “Accept Order Quantity”.

Figure 5: Accept Order Quantity

Chart

Figure 6: Chart

The chart visualizes Total Costs. X-axis = “Order Quantity”, Y-axis = “Total Costs”. In addition, the green line shows the calculated optimum. All Inventory Costs are displayed. If you want to filter the chart in relation to a vendor, you can use the filter field in the header section.

Factboxes

In the fact boxes, the prices and discounts used for calculation are displayed.

Figure 7: Factboxes