Using Probability Rules

Overview: Inventory levels at different locations frequently fluctuate because of sales, returns, shrinkage, purchase order receipts, and other activities. As a result, the most recent inventory count in Order Broker might not accurately reflect the actual quantity available in the store or warehouse when the customer wants the product. To avoid disappointing the customer with information that might be outdated or incorrect, you can apply probability rules, based on your best predictions about inventory activity, against the inventory information provided by Order Broker in locate items searches or for the Routing Engine.

Example: Store 10 is not part of an online system; Order Broker receives inventory updates from the store each night but not throughout the day. You can apply a probability rule that always reduces the available quantity of products in store 10 by the average sell-through rate. The average sell-through rate for product AB100 in store 10 is 15 units a day. When a customer inquires on availability for product AB100, if the current off-line available quantity for the product is 20, Order Broker presents the available quantity as 5.

What is a rule? A rule lets you specify whether to transform the availability information for a product location in the response to a locate items request message, or when the Routing Engine selects a fulfilling location. For example, rules can indicate to exclude product locations in locate items or order assignment, or to apply a calculation against one of the inventory fields in the search results (such as reducing the available quantity by 15 in the sample above). The inventory fields that a rule can update are the available quantity, the next expected purchase order date, or the next expected purchase order quantity.

Note:

The rule does not actually update the inventory information for the product location; it only controls the information displayed in the search results or used by the Routing Engine when it assigns a fulfilling location. For example, if a rule results in reducing the available quantity to 5, this quantity is displayed in the search results for a locate items request; but the available quantity specified for the product location remains the same.

Simple rules: Rules can be as simple or complex as you need them to be. A simple rule might be: always exclude location 20 from locate items searches^Foot 1 ^Foot 1. You might use this rule, for example, before you open a new store location for business if you are currently stocking it with inventory, but the inventory is not yet for sale to the public. Another simple rule might be: always decrease the available quantity by the shrink rate.

More complex rules (rules with tests): A more complex rule applies one or more tests before determining whether to exclude a location or update one of the inventory fields. For example, a rule with one test might be: if the available quantity is less than the sell-through quantity, then present the available quantity as 0.

Another example of a more complex rule might allow you to add a cushion for late purchase orders. A rule might be: if the available quantity is less than 10 and the next expected PO date is before today (i.e., the purchase order is late), reduce the available quantity by 20%. Another rule might apply to a group of products for which shipment is typically late. A rule might be: if system product is AB200 or system product is AB300, add 5 days to the next PO date. Similarly, you might set up a rule based on other product attributes, such as: if department is 1538, reduce the available quantity by 15%.

Assigning rules: You can assign rules to one or more locations, location types, or organizations. For example, if you would like a rule to apply only to a particular store location, you can assign it to that location only. If you would always like to reduce the available quantity by the sell-through quantity for all U.S. stores, you would apply that rule to that location type. When you assign rules, you have the option of specifying a beginning and/or ending date, and of specifying whether the rule applies only to off-line or on-line inventory levels (see inventory level type).

Rules use a hierarchy, similar to Proximity Locator Searching, in determining which rule applies to which product location. For example, if you assign a rule at the location level, it might override a rule assignment at the location type or organization level.

Within a single level, you use sequence numbers to identify the priority to rules. For example, if you have 2 rules assigned to a location type, the rule with the lower sequence number is evaluated first.

Because each rule can update only a single field, it is possible for a product location to be subject to multiple rules. Once a particular field has been subject to a rule, Order Broker stops evaluating rules for the product location in that search. However, a rule set up to exclude a product location overrides any rules that apply to individual fields.

When does probability rule evaluation take place? During a search for product locations, Order Broker:

identifies the product locations that might be eligible for consideration based on proximity
applies any probability rules
determines which product locations are still eligible after applying the probability rules
for a locate items search or order assignment, sorts the product locations based on the hierarchy specified at the Preferences screen or the Edit Order Broker Preference Override screen
for a locate items search, eliminates any product locations that are not within the Maximum No. Responses specified at the Preferences screen, and returns the results

Rules do not apply when a locate item request or submit order request specifies a fulfilling or sourcing location.

Exclude Locations with Zero Available? If the Exclude Locations with Zero Availability setting at the Preferences screen is selected, any possible product locations whose current available to promise quantity are 0 or less are excluded from consideration before the application of any potential probability rules.

Flexibility of rule creation: Order Broker provides you with extreme flexibility in setting up rules; however, it is important that you make sure your rules are not so complex that the results are unpredictable. Oracle recommends that you test each rule that you apply to make sure that it works as you intend it to.

Rounding: Available quantity and next PO quantity are always presented as whole numbers in the locate items or Routing Engine search results, so that Order Broker rounds the result of any calculation up or down to the nearest whole number. For example, a result of 18.4 is rounded down to 18; 18.5 or higher is rounded up to 19.

For more information: See Probability Rule Wizard for instructions on setting up rules, rule examples, and suggestions for testing rules.

Note:

In order to use probability rules for an organization, you must select the probability rules preference. You can set this preference only at the organization level at the Preferences screen.

Footnote Legend

Footnote 1: See the Sample Rules for instructions on how to create each of the sample rules.