Oracle Inventory MinMax Planning

MinMax Planning
You can use minmax planning to maintain inventory levels for all of your items or
selected items. With minmax planning, you specify minimum and maximum inventory
levels for your items. When the inventory level for an item (onhand quantities plus
quantities on order) drops below the minimum, Oracle Inventory suggests a new
purchase requisition, internal requisition, move order, or job to bring the balance back up
to the maximum.
Oracle Inventory performs minmax planning for your items at either

Organization level

Sub inventory level.

When you minmax plan at the organization level, you can optionally include the
following transactions as demand in the minmax planning calculation:
Unreserved sales orders, reserved sales orders, account issue move orders, and work in
process component requirements. Purchase requisitions and internal 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.
Organization Level MinMax Planning
When you minmax plan at the organization level, Oracle Inventory looks at inventory
balances, purchase requisitions, internal requisitions, internal sales orders, and WIP jobs
as supply. It looks at sales orders, WIP job component requirements, and account issue
move orders as demand.
To use minmax planning at the organization level, you must set the item attributes used
by minmax planning. You can start by setting the Inventory Planning Method item
attribute to Minmax planning. You establish your minimum and maximum levels used in
the calculation using the MinMax Minimum Quantity and the MinMax 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 minmax
planning. Set the Make or Buy flag to Make to optionally generate unreleased jobs and to
Buy to optionally generate requisitions. For buy items, set the List Price for the item to
automatically generate requisitions.

For repetitive items, since you cannot generate repetitive plans, you have the option of
generating requisitions, unplanned jobs, or a report only.
Minmax planning is performed by running the MinMax Planning report. By selecting
organization level planning, you run minmax 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 Nonnettable 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, in which:

Nettable Quantity on Hand is the sum of the quantities on hand for the item across
all the nettable sub inventories within your organization. Nonnettable quantities
may optionally be included.

On Order is the sum of open purchase orders, purchase requisitions, internal

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, in which:

Minimum Quantity is the value for the MinMax 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.

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, in which

Nettable Quantity on Hand is the sum of the quantities on hand for the item across
all the nettable subinventories within your organization. Nonnettable 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.

Open Demand is the sum of unreserved sales orders, inventory reservations,

including reserved sales orders, account issue move orders, and WIP component
demand scheduled for issue on or before the demand cutoff date.

If Total Available < Minimum Quantity, suggest a new order, in which

Minimum Quantity is the value for the MinMax 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 MinMax 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.
The following example shows you how Oracle Inventory performs minmax 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 = Minmax planning

Minmax minimum quantity = 100

Minmax maximum quantity = 500

If you run the MinMax 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 minmax 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 minmax maximum, Oracle Inventory
will plan an order for 425.

If you run the MinMax 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 minmax 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 minmax maximum, Oracle Inventory
will plan an order for 515.