Inventory Planning


Inventory planning refers to a set of processes that one can adopt to procure optimal quantity of stock required to fulfill customer orders, in a way that it aligns with customer's demand for the items.  Better inventory planning helps eliminate wastage, reduce obsolete inventory, and improves company's cash flow management. Thus it is an important aspect of any business's success.


From the Inventory Planning page, you can easily determine the items with stock deficit. The items with stock deficit are the items whose demand quantity (i.e. quantity required to fulfill customer demand) is greater than its stock. Inventory of such items can easily be replenished by creating a purchase order automatically (create auto-PO).


System automatically calculates the stock deficit as below:


  1. Quantity Required = Demand Quantity - (Stock+ PO Quantity)

where,  Demand Quantity= The quantity of items/goods required to fulfill all customer Sales Orders.

  1. PO Quantity: The quantity of items that will be procured via already existing Purchase Orders.
  2. Stock = Available stock of item in inventory (see figure 1).



(Figure 1 - Inventory planning page)


How Create Auto-PO works?


  • Purchase Order(s) will be created automatically for all items whose Quantity Required > 0.
  • Quantity Required for an item should be greater than the MinPO Quantity set.
  • The items must have a default supplier set up. Note: Suppliers are mapped to Products.
  • Items procured from same default supplier will be procured via the same Purchase Order. A different Purchase Order will be created for items procured from another default supplier.


Steps to create Auto-PO:


1.1. Create Auto-PO (see figure 2).



(Figure 2 - Create Auto PO)


1.2. Select Yes. This will result in creation of two purchase orders (see figure 3):



(Figure 3 - Creation of 2 Purchase Orders)


2.1.  One purchase order has been created for Supplier R.K Enterprises for procurement of items – Coca Cola and Mirinda (see figure 4 and 5).



(Figure 4 - First section of the Purchase Order)



(Figure 5 - Two items for the first section of the Purchase Order)


2.2.  Another Purchase Order has been created for Supplier Suresh Traders for procurement of item Paper Boat Aam panna (see figure 6 and 7).



(Figure 6 - Second section of the Purchase Order)



(Figure 7 - One item for the second section of the Purchase Order)