Purchase Assistant

Owned by Stephen Juliano (Unlicensed)
Last updated: Feb 16, 2022 by Colleen Juliano
5 min read

Overview

The Purpose of the Purchase assistant is to calculate the minimum inventory quantities and lead times required to maintain an inventory balance without over stocking. The Purchase assistant works together with the PO generator to automate inventory replenishment cycles. 

Detail

Using the Purchase Assistant

In order to use the Purchase assistant you must chose the parameters to evaluate.

  • Starting and ending product Category – choose range of categories or leave blank for all

  • Starting and Ending Class – chooses range of classes or leave blank for all.

  • Starting and ending item – choose range of items or leave blank for all

  • Starting and Ending warehouse location - Choose the warehouse you will be establishing minimums for.

NOTE: If an item can be stocked in multiple warehouses it will show up on the report for each warehouse. It is advised to only choose one warehouse at a time.

  • Vendor – currently it is mandatory that only one vendor be used at a time in the purchase assistant.

  • Usage months – this is the time frame of your search. It will default to six months but you can change it to whatever time frame is needed.

  • Extra Percent – extra percent is the "Safety Stock" that you will like to build in. This number will add to the minimum quantity.


After adding the parameters that you would like to run you must press the continue button to start the process. The Purchase Assistant will evaluate the daily usage for a given time period. It will take this daily usage and determine the minimum stock to have in inventory so as not to run out, based on the historical usage. This minimum quantity is figured per item and per warehouse and can be found on the warehouse tab of the Inventory query menu. It is used by the PO generator to decide what items need to ordered for each vendor to maintain perpetual inventory. 
Example: You need to know how many STDINV-100 to keep in inventory so as not to run out and yet not have stock sitting on the shelves for too long of a time. The Purchase Assistant will add all of our STDINV-100 sales over a six-month period and divide that by the 180 days to get a daily sale rate of 11.5 units. Based on 11.5 units a day the Purchase assistant will recommend we keep 138 units on the floor at a minimum. It will also figure in any extra percentage of safety stock that we may want to keep. In this example we would like an extra 5% so our minimum quantity will jump to 145. This number can be fed into the PO generator for auto ordering.

The Purchase Assistant Screen

The second screen of the Purchase Assistant will give you it's "recommendations". The top half of the screen will summarize what you chose to evaluate and also has icons to work your data some more.

  • Vendor – The vendor that you chose to evaluate

  • Usage months – The period of time that you chose to look back through

  • Extra percent – the amount of safety stock that you chose to build into you evaluations.

  • Apply icon – If you decide that you would like to re-evaluate the data with different usage months or percent extra you can change the amount and press the apply button to re-figure the recommendations.

  • Calculate Reorder QTY – This icon currently will change the reorder qty to match the minimum qty.

Note: in a future release this button will factor in vendor order qty and UOM to decide the min QTY to order.

  • Update Inventory – This icon will make the Purchase assistants recommendations and your changes real, by updating the items warehouse tab MIN QTY amount. This new amount is what will feed into and drive the PO Generator.

  • Update and Generate PO – Does the same as update inventory but takes you directly to the PO generator when done.

The lower half of the second Purchase Assistant screen is the actual recommendations. It will list the item, description and its daily and periodic usage, old and new lead times, min quantity and reorder quantity. Any of the white boxes can be changed and they will re-calculate the line upon pressing enter. (Not tab)

  • Item – the item that is being evaluated

  • Description – the items description from item setup

  • Usage daily – historically the amount used over specified period of time

  • Usage Period – The amount used over the period specified.

  • Lead Time: Old – Lead time before running of purchase assistant (this is a good way to spot sales trends)

  • Lead Time: New – This is the average amount of time from PO generation to PO receipt for all PO in the specified time period. This number can be changed and the line will re-calculate upon pressing enter

  • Extra Percent – The amount of safety stock to build into your minimum quantity to account for volatility this number can be changed and the line will re-calculate upon pressing enter.

  • Min QTY: Old – Minimum quantity before running the Purchase Assistant

  • Min QTY New – The new minimum Quantity based upon the information that you fed into the Purchase Assistant. This number can be changed and the line will re-calculate upon pressing enter

  • Reorder QTY: Old – The old number of items to order that would be placed on a purchase order when run through the PO generator.

  • Reorder QTY: New - This is the new default amount that will populate to purchase orders when they are automatically generated. This number can be changed also.

The extra percent will allow you assign how much of a cushion you want to keep so you can handle spikes in inventory flow. 

Advantages

  • 1). Limit the amount of backorder items

  • 2). Avoid rush charges and customer dissatisfaction

  • 3). Minimize your inventory and enhance Just in Time Delivery cycles

  • 4). Use with PO generator to manage consolidated freight discounts.