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Order Point Review

The Order Point Review Analytic is where users can view how well their planning processes are running and where issues should be addressed. The analytic is a result of analysis performed in the Classification, Segmentation, Lead Time, Stocking, and Order Point Calc analytics.

It is recommended to view this UI and download the excel spreadsheet on a monthly basis after the segmentation analysis is run. Upon review, you may change the order points and other values as required.

Order Point Review Interface Overview

  1. Demand Type: Presents the demand stream of the item. I = Independent Demand. D = Dependent Demand. I&D = Independent and Dependent Demand.
  2. Prior Reorder Point: The prior order point is determined by going back in time at the length of the items lead time or 5 weeks, whichever is greater. The value is determined each time the Segmentation Analysis is run.
  3. Act to Forecast Accuracy: Compares the items actual demand against the forecast demand over the items lead time or 5 weeks whichever is greater. The starting point is the prior order point. Hyperlinked to the Segmentation Analysis.
  4. Cover: Calculates if the prior reorder point covered actual lead time demand. This is based on a snapshot of time since the order point may have been updated a number of times over the month and the value being used here is as of the last update.
  5. % Supply On Time: On time performance for supply replenishment from suppliers and production. Hyperlinked to Lead Time Analysis.
  6. % Demand On Time: On time performance for demand (customer order) replenishment. Hyperlinked to Stocking Analysis.
  7. Stock-Outs: The number of stock outs over the last month. Calculated when the Segmentation Analysis is run. It is how many times a stocked item has had an on hand that is zero or negative over its cumulative lead time (including the component lead time) or 5 weeks whichever is greater.
  8. Avg Stockout Length: The average time the item was out of stock during the measurement period.
  9. High Demand: A sampling of the highest cumulative demand over an items lead time when sampled over the last 6 months. This is calculated as part of the Segmentation Analysis and is also used as part of an intermittent demand calculation.
  10. Calc Order Point: This is the currently applied order point.. It is calculated as forecast + selected safety stock + safety time (if applied). Hyperlinked to Order Point Point Calc Analysis where this value is calculated. It is automatically updated each time the safety stock or forecast is updated.
  11. Total Order Point: The sum of item's Order Point + Upper Level Forecasts (forecasts are passed down from all the parents' forecasts to the item and then summed across the item's lead time) + Sum of Upper Level Safety Stocks. This value is automatically updated each time the safety stock or forecast is updated. This is a helpful metric since a component item in most cases does not have its own independent order point since it is dependent on its upper level items stocking requirement. This metric helps identify what the items inventory trigger is based on the triggers of all its upper level requirements.
  12. Periodic Order Quantity: Quantity to order at one time based on the Periodic Order Quantity basis selected. Hyperlinked to the Segmentation Analysis where it is calculated.
  13. Lead Time: The items lead time. From the Lead Time Analysis where it is managed.
  14. Days Cover Over Lead Time: Calculates the number of days the order point is equivalent to as compared to lead time days. Calculated using the 52 week independent and dependent historical demand.
  15. Demand Change Alert: Describes the rate of change of demand by comparing the percentage difference between the last 13 week average demand and the last 52 week average demand. Hyperlinked to Classification Analysis where it is calculated. If the change is less than or equal to 15% the item receives an "OK" designation. If the change is between 15% and 50% the item receives a "Concern" designation. If the change is greater than than 50% the item receives an "Alert" designation. The + or - after the designation communicates if the trend is positive or negative i.e. negative means the 13 week average is less than the 52 average.
  16. Stability Index: The "Stability Index" is a measure of how much the forecast deviates from the recent past. The assumption is that on aggregate the forward looking 13 week average should not deviate excessively from the previous 13 weeks. As such, when we see a high importance item with a low stability index (under 50%)
  17. Stock: If the item is stocked in inventory or not-stocked (made or purchased to order). From the Stocking Analysis where it is managed.
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