SKULabs makes reordering easy by auto-populating the "Quantity" field when creating purchase orders.

To set up re-order rule, navigate to Purchase Order Settings page, enter the re-order rule and save at the top right corner.

Setting a Re-order Rule:

Since different businesses implement varying reordering strategies, SKULabs offers a re-order rule that is customizable to suit your reordering strategy using these variables:

on_hand, reserved, free, incoming, alert, sold

Definitions:

On_hand: currently available physical inventory.

Reserved: stock allocated/reserved by open orders awaiting fulfillment.

Free: the net quantity of freely available stock (on_hand - reserved)

Incoming: stock expected to be received from open purchase orders.

Alert: desired stock threshold to replenish stock

Sold: This count represents the total quantity of an item that has been sold over the # days sold provided under the filters for the the PO Add item table.

Re-order point: equals the multiple of maximum units sold per day and maximum lead time (factoring in emergency delays).

Safety stock: equals to stock that would be needed in case of delayed PO delivery. It is roughly the multiple of maximum daily sales and maximum delay time.

Back-ordered stock: equals to the amount of stock customers have ordered but have not yet received because it's currently out-of-stock

Target a re-order point

Set items' stock alert levels to equal to re-order points and use re-order rule as follows:

Math.max(alert - (free + incoming), 0)

Target a re-order point with safety stock

It's best practice to reserve safety stock just in case of unexpected sales spike or a delay in PO delivery time, particularly when implementing a lean or just-in-time inventory management strategy.

Set items' stock alert levels to equal to re-order points. Then, determine a safety stock factor, and one way to determine a safety-stock factor is as a percentage of available stock (free + incoming). For instance, if you use a safety stock factor of 15%, the re-order rule would be:

Math.ceil(Math.max(alert - (free + incoming) * 0.15, 0))

Target backordered stock

For businesses that allow to backorder, target backordered stock needed to fulfill open orders by using this rule:

Math.max(0 - (free + incoming), 0)


How to create a purchase order

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