Min-Max Planning
You can use min-max planning to maintain inventory levels for all your items or selected items. With min-max planning, you specify minimum and maximum inventory levels for your items. When the inventory level for an item drops below the minimum, Oracle Inventory suggests a new requisition or job to bring the balance back up to the maximum.
Oracle Inventory performs min-max planning for your items at either the organization level or the subinventory level. When you min-max plan at the organization level, you can optionally include open sales orders and work in process component requirements as demand in the min-max planning calculation. Purchase requisitions for buy items and WIP unreleased jobs for make items for the suggested replenishment quantities can be optionally created. You can then turn these requisitions into purchase orders or internal orders and the unreleased jobs into jobs for the required items.
When you min-max plan at the subinventory level, you can optionally include only open sales orders as demand in the min-max planning calculation. Requisitions for the suggested replenishment quantities can be optionally created. Also, subinventory level planning cannot generate jobs and does not consider WIP jobs as supply or WIP components as demand. You can then turn these requisitions into purchase orders or internal orders for the required items.
Organization Level Min-Max Planning
When you min-max plan at the organization level, Oracle Inventory looks at inventory balances, purchase orders and WIP jobs as supply and sales order and WIP job component requirements as demand.
To use min-max planning at the organization level you must set the item attributes used by min-max planning. You can start by setting the Inventory Planning Method item attribute to Min-max planning. You establish your minimum and maximum levels used in the calculation using the Min-Max Minimum Quantity and the Min-Max Maximum Quantity item attributes. You can optionally set the order quantity modifier item attributes (Minimum Order Quantity, Maximum Order Quantity, and Fixed Lot Size Multiplier) to further control the suggested order quantities generated by min-max planning. Set the Make or Buy flag to Make to optionally generate unreleased jobs and to Buy to optionally generate requisitions. See: General Planning Attribute Group.
For repetitive items, since you cannot generate repetitive plans, you have the option of generating requisitions, unplanned jobs, or a report only.
Min-max planning is performed by running the Min-Max Planning Report. By selecting organization level planning, you run min-max planning for your organization. In addition to the planning level option, Oracle Inventory offers the options to Net Reserved Orders, Net Unreserved Orders, Net WIP Demand, and Include Non-nettable Inventory Quantities when calculating availability. You also specify a Demand Cutoff Date and a Supply Cutoff Date. If you choose No to all the net demand options, Oracle Inventory performs the following calculation:
- Nettable Quantity on Hand + On Order = Total Available, where:
- Nettable Quantity on Hand is the sum of the quantities on hand for the item across all the nettable subinventories within your organization. Non-nettable quantities may optionally be included
- On Order is the sum of open purchase orders, requisitions, internal orders and work in process jobs scheduled for receipt on or before the Supply Cutoff Date
- If Total Available < Minimum Quantity, suggest a new order, where:
- Minimum Quantity is the value for the Min-Max Minimum Quantity item attribute.
- Order Quantity = Maximum Quantity - Total Available, adjusted for order quantity modifiers:
- Oracle Inventory revises the order quantity if necessary for the quantity to be a multiple of the fixed lot size multiplier
- The order quantity must be greater than or equal to the minimum quantity, or Oracle Inventory revises the quantity upward to the minimum
- The order quantity must be less than or equal to the maximum quantity, or Oracle Inventory revises the quantity down to the maximum.
If you choose Yes to any of the net demand options, Oracle Inventory performs the following calculation:
- Nettable Quantity on Hand + On Order - Open Demand = Total Available, where
- Nettable Quantity on Hand is the sum of the quantities on hand for the item across all the nettable subinventories within your organization. Non-nettable quantities may optionally be included.
- On Order is the sum of open purchase orders, requisitions, and internal orders and work in process jobs scheduled for receipt on or before the Supply Cutoff Date
- Open Demand is the sum of unreserved sales orders, reserved sales orders, and WIP component demand scheduled for issue on or before the Demand Cutoff Date
- If Total Available < Minimum Quantity, suggest a new order, where
- Minimum Quantity is the value for the Min-Max Minimum Quantity item attribute.
- Order Quantity = Maximum Quantity - Total Available, adjusted for order quantity modifiers:
- Oracle Inventory revises the order quantity if necessary for the quantity to be a multiple of the fixed lot size multiplier
- The order quantity must be greater than or equal to the minimum quantity, or Oracle Inventory revises the quantity upward to the minimum
- The order quantity must be less than or equal to the maximum quantity, or Oracle Inventory revises the quantity down to the maximum.
When you run the Min-max planning report, you can have Oracle Inventory create requisitions for Buy items and unreleased jobs for Make items by answering Yes to Restock. You must also specify a location to serve as the default deliver to location on the requisitions. Oracle Inventory creates purchase requisitions for Buy items when the item attribute Replenishment Source Type is set to Supplier. Oracle Inventory creates internal requisitions for internal sales orders for Buy items when the item attribute Replenishment Source Type is set to Inventory. For internal requisitions, Oracle Inventory uses the item attribute Source Organization to determine the organization from which the internal requisition sources the item. For Repetitive Items you optionally create requisitions or unreleased jobs. See: Min-Max Planning Report.
The following example shows you how Oracle Inventory performs min-max planning. Assume an item has the following quantity values and item attribute settings:
- Nettable quantity on hand = 25
- Open supply quantity = 50
- Open reserved sales order quantity = 90
- Inventory planning method = Min-max planning
- Min-max minimum quantity = 100
- Min-max maximum quantity = 500
If you run the min-max planning report, and specify No to Net Reserved Orders, Oracle Inventory performs the following calculations:
- Total Available: 25 + 50 = 75
- We assume that all the supply is within the supply cutoff date, for a supply total of 50
- Total available quantity is 75
- Below min check: 75 < 100
- The total available quantity is less than the min-max minimum quantity, so Oracle Inventory plans a new order
- Max quantity less total available: 500 - 75 = 425
- To bring the quantity available back to the min-max maximum, Oracle Inventory will plan an order for 425.
If you run the min-max planning report, and specify Yes to Net Reserved Orders, Oracle Inventory performs the following calculations:
- Total Available: (25 + 50) - 90 = (-15)
- We assume that all the supply is within the supply cutoff date, for a supply total of 50
- We assume that all the demand is within the demand cutoff date, so open reserved orders total to 90
- Total available quantity is (-15)
- Below min check: (-15) < 100
- The total available quantity is less than the min-max minimum quantity, so Oracle Inventory plans a new order
- Max quantity less total available: 500 - (-15) = 515
- To bring the quantity available back to the min-max maximum, Oracle Inventory will plan an order for 515.
Subinventory Level Min-Max Planning
When you min-max plan at the subinventory level, Oracle Inventory looks at inventory balances, purchase order and internal order supply, and optionally, sales order demand for a single subinventory only. In addition, rather than using item attribute planning modifiers, Oracle Inventory uses values and parameters set at the item/subinventory level.
To perform min-max planning at the subinventory level, you establish the following values at the subinventory level using either the Subinventory Items or the Item Subinventories windows:
- Planning method set to Min-max planning
- Fixed lot multiple (optional)
- Sourcing type (supplier or inventory)
- Sourcing organization (if type is inventory)
- Sourcing subinventory (if type is inventory) (optional)
See Also
Assigning Subinventories to an Item
Assigning Items to a Subinventory
Min-Max Planning Report Calculations
Min-max planning is performed by running the Min-Max Planning Report. By selecting the subinventory level planning and specifying a subinventory, you run min-max planning for a single subinventory only. In addition to the planning level option (organization or subinventory), Oracle Inventory offers the option to Net Reserved Demand and to Net Unreserved Demand when calculating availability. You also specify a Demand Cutoff Date and a Supply Cutoff Date. If you choose No to the Net Demand options, Inventory performs the following calculation:
- Quantity on Hand + On Order = Total Available, where:
- Quantity on Hand is the quantity in the subinventory you specified in the Min-Max Planning Report.
- On Order is the sum of open purchase orders, requisitions, and internal sales orders scheduled for receipt to the specified subinventory prior on or before the Supply Cutoff Date. Note that supply orders referencing a different subinventory, or with no subinventory specified, are not included
- If Total Available < Minimum Quantity, suggest a new order, where:
- Minimum Quantity is the value for the Min-Max Minimum Quantity set at the item/subinventory level.
- Order Quantity = Maximum Quantity - Total Available, adjusted for item/subinventory order quantity modifiers:
- Oracle Inventory revises the order quantity if necessary for the quantity to be a multiple of the fixed lot size multiplier
- The order quantity must be greater than or equal to the minimum quantity, or Oracle Inventory revises the quantity upward to the minimum
- The order quantity must be less than or equal to the maximum quantity, or Oracle Inventory revises the quantity down to the maximum.
If you choose Yes to the Net Reserved Demand and/or the Net Unreserved Demand option, Oracle Inventory performs the following calculation:
- Quantity on Hand + On Order - Open Demand = Total Available, where
- Quantity on Hand is the quantity in the subinventory specified in the Min-Max Planning Report.
- On Order is the sum of open purchase orders, requisitions, and internal orders scheduled for receipt to the specified subinventory on or before the Supply Cutoff Date. Note that orders referencing a different subinventory, or with no subinventory specified, are not included
- Open Demand is the sum of open sales orders and inventory reservations scheduled to ship from this subinventory on or before the Demand Cutoff Date. Note that sales orders and inventory reservations referencing a different subinventory, or with no subinventory specified, are not included
- If Total Available < Minimum Quantity, suggest a new order, where:
- Minimum Quantity is the value for the Min-Max Minimum Quantity specified at the item/subinventory level.
- Order Quantity = Maximum Quantity - Total Available, adjusted for order quantity modifiers specified at the item/subinventory level:
- Oracle Inventory revises the order quantity if necessary for the quantity to be a multiple of the fixed lot size multiplier
- The order quantity must be greater than or equal to the minimum quantity, or Oracle Inventory revises the quantity upward to the minimum
- The order quantity must be less than or equal to the maximum quantity, or Oracle Inventory revises the quantity down to the maximum.
When you run the Min-max report, you can have Inventory create requisitions by answering Yes to Restock.. You must also specify a location to serve as the deliver to location on the requisitions. Oracle Inventory creates purchase requisitions for items with the item/ subinventory Sourcing Details Type set to Supplier, Inventory creates internal requisitions for internal sales orders for items with the item/ subinventory Sourcing Details Type set to Inventory. For internal order requisitions, Inventory uses the item/ subinventory Sourcing Details Organization to determine the organization from which the internal requisition sources the item. See: Requesting the Min-Max Planning Report.
The following example shows you how Oracle Inventory performs min-max planning. Assume an item has the following quantity values and item attribute settings:
- Quantity on hand for specified subinventory = 25
- Open supply quantity for specified subinventory = 50
- Open sales order quantity placed against specified subinventory= 90
- Inventory planning method at item/subinventory level = Min-max planning
- Min-max minimum quantity specified at the subinventory level = 100
- Min-max maximum quantity specified at the subinventory level = 500
If you run the min-max planning report, and specify No to the Net Demand options, Inventory performs the following calculations:
- Total Available: 25 + 50 = 75
- The quantity on hand for the specified subinventory is 25
- We assume that all the supply is within the supply cutoff date, and is destined for our specified subinventory, for a supply total of 50
- Total available quantity is 75
- Below min check: 75 < 100
- The total available quantity is less than the min-max minimum quantity, so Oracle Inventory plans a new order
- Max quantity less total available: 500 - 75 = 425
- To bring the quantity available back to the min-max maximum, Oracle Inventory will plan an order for 425.
If you run the min-max planning report, and specify Yes to the Net Demand option, Oracle Inventory performs the following calculations:
- Total Available: (25 + 50) - 90 = (-15)
- The quantity on hand for the specified subinventory is 25
- We assume that all the supply is within the supply cutoff date, and is destined for our specified subinventory, for a supply total of 50
- We assume that all the demand is within the demand cutoff date, and the sales orders are against our specified subinventory, so open sales orders total to 90
- Total available quantity is (-15)
- Below min check: (-15) < 100
- The total available quantity is less than the min-max minimum quantity, so Oracle Inventory plans a new order
- Max quantity less total available: 500 - (-15) = 515
- To bring the quantity available back to the min-max maximum, Oracle Inventory will plan an order for 515.
See Also
Requesting the Min-Max Planning Report
