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Administrator Guide
Last Updated: 2023-09-08
Automatically Calculate Recommended Reorder Points

Automatically Calculate Recommended Reorder Points

Security:
Manage: Replenishment
 domain in the Inventory functional area.
You can configure Workday to calculate a recommended reorder point for your items to reduce manual data review. We enable you to make frequent adjustments to minimum and maximum stocking quantities based on your usage activity, which improves your demand forecasting and anomaly detection.
  1. Access the
    Calculate Recommended Reorder Point
     task.
  2. As you complete the task, consider:
    Option Description
    Reorder Calculation Type
    Current ADU
     uses the average daily usage for the purchase item, on the inventory site, in the base unit of measure. This method is best for:
    • New items with no history.
    • Items with inconsistent usage.
    Previous Horizon
     uses the number of transactions during the time period you configure on the
    Previous Horizon Days
     and
    Days to Include
     prompts. We recommend this type for items with consistent usage.
    Seasonality and Trend
     uses historic year-over-year data to calculate trend and seasonality. Best for seasonal items with consistent usage.
    Use Preferred Supplier Lead Time
    Select to use the configured
    Preferred Supplier Lead Time
     value from the Inventory Site options on the purchase item, in your reorder point calculation.
    Use Target Days on Hand
    Select to use the minimum amount of inventory you want to have on hand, measured in number of days of stock for the item in your calculation.
    Reorder Manual Adjust %
    Enter a percentage multiplier to add to your recommended reorder point. Example: Make a 20% adjustment for a seasonal rush of inventory usage.
    Update Reorder Point
    Select to update the reorder point on the purchase items to the value recommended by the task.
    Reorder Tolerance %
    When you configure Workday to update your reorder point, you can enter a tolerance percentage. Workday automatically updates your reorder point only when it falls within the percentage you configure. Example: You enter in 25% and the current reorder point is 100, so the recommended reorder point must be between 75-125 to update. When you leave the field blank, Workday updates all reorder points with the recommended values the task generates.
    Auto Generate Worksheet
    For mass site and item updates, select to generate your reorder point data in a Worksheet.
    Purchase Item Request Type
    Workday displays this prompt when you select the
    Auto Generate Worksheet
     option. Use this prompt to select the corresponding purchase item template type that Workday uses to generate your reorder point data.
Workday provides the recommended reorder point of the purchase item in the replenishment unit of measure.
Workday calculates these fields:
  • Adjusted Average Daily Usage, which equals the
    Average Daily Usage
     plus ((
    Average Daily Usage
     multiplied by the
    Reorder Manual Adjust %
    ) divided by 100).
  • Recommended Reorder Point, which equals the
    Adjusted Average Daily Usage
     multiplied by the (
    Lead Time
     plus the
    Target Days On Hand
    )) plus the
    Safety Stock
    .
  • Recommended Max Quantity, which equals the
    Average Daily Usage
     multiplied by the (
    Max Targeted Days on Hand
     plus the
    Lead Time
    ) plus the
    Safety Stock
    . Workday converts the value to Replenishment UOM before adding the safety stock value.
You can use the
Replenishment Optimization
 report to view replenishment details by inventory site and purchase item.