Oracle Warehouse Management

System
Min-Max Replenishment
An Oracle White Paper
June 2002
 Oracle Warehouse Management System
Min-Max Replenishment

INTRODUCTION

The purpose of this white paper is to provide a more detailed description of the
working of Inventory’s Min-Max Planning report than is done in the Inventory User
Guide. It is assumed that the reader is already familiar with the material covered in
the User Guide’s section on Min-Max Planning. We start with the profile options
used by the report, then describe how reorder quantity gets calculated and finally
discuss the restocking process where min-max generates Purchase Orders,
Requisitions, WIP Jobs and Move Orders for replenishment.

Profiles used by Min-Max Planning

Note: These profiles are updateable at all levels (user, responsibility, application or
site).

INV_MINMAX_REORDER_APPROVED (INV: Minmax Reorder Approval) –

This profile determines whether restock orders generated by min-max are created
with status already set to ‘approved’, or require additional processing for approval.
It affects Purchase Orders, Requisitions and WIP work orders (but not Inventory
move orders). It has two values: “Incomplete” and “Approved”. Inventory
predefines a value of Approved for this profile for all levels upon installation. If
you choose Incomplete, you can load requisitions as unapproved and use the
document approval functionality in Oracle Purchasing. For WIP, setting the profile
to Approved ensures that the job or schedule is in a status of Released upon
creation (a profile value of Incomplete will set the job status to Unreleased).

INV_PURCHASING_BY_REVISION (INV:Purchasing By Revision) – If this

profile is set to “Yes”, the report will choose the highest valid revision of a revision-
controlled item and specify this revision for the purchase orders or requisitions that
are created for restocking.

INV_ROUND_REORDER_QTY (INV: Round Reorder Qty) – Only used if a fixed

lot multiple is specified for a min-max planned item. Defining a fixed lot multiple
ensures that the reorder quantity is adjusted upwards or downwards to make it an
even multiple of that value. If the profile is set to “Yes” the reorder quantity is
rounded up and if it is set to “No” the reorder quantity is rounded down. Please see
the section on reorder quantity calculations for more information.

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 Reorder Quantity Calculation

Reorder
Quantity?

YES NO

Total Available < Total Available

Minimum for >= Minimum for
Item Item

How much to
Reorder???
Reorder Quantity =
Maximum Stockable
Fixed Lot Multiple
Quantity - Total Available
Defined?

YES NO

Take the If Minimum and Maximum Order

INV_ROUND_REORDER_ Quantities specified then consider
QTY profile values in them for reorder quantity
consideration. calculation

Arrive at a final reorder

quantity and reorder
using the correct source
type

After arriving at an initial estimate for the reorder quantity (Maximum quantity –
Total available, where total available = on hand + supply - demand), it goes through
the following additional checks in the order in which they are listed:

• If a fixed lot multiple is defined, round the reorder up or down based on

profile INV_ROUND_REORDER_QTY. For e.g. if the reorder quantity
was initially estimated to be 24, and the fixed lot multiple was set to 10, the

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 reorder quantity would be rounded up to 30 if the profile was set to Yes,
or rounded down to 20 if the profile was set to No.

• If a maximum order qty is not specified or if the reorder quantity is less

than maximum order quantity, no further changes are required (the next
check is skipped)

• If a maximum order quantity is specified and reorder quantity exceeds

maximum order quantity, we need to make sure we cap each restocking
order at the specified maximum, and also ensure that any remaining
quantity will satisfy the minimum order quantity requirement. The
following example will clarify this further:

Say,
reorder quantity = 34
maximum order qty = 10
minimum order qty = 5

We first create 3 orders for 10 each, which is 30. The left over quantity is 4. Since
the minimum order quantity is 5 we should discard the remaining quantity. So the
reorder quantity that is finally displayed on the report output will be 30. On the
other hand if the remaining qty was say 8, then the last move order/requisition/work
order would be for qty 8, and reorder quantity after all adjustments would still be 38,
and so on.

Note: This last check (namely checking to see if the balance met or exceed
the minimum order quantity requirement) was introduced in patchset H and
does not exist in previous releases, so in this example, the reorder quantity
would be 3 * 10 + 4 = 34

Needless to say if no minimum order qty is specified (or if it is 0) then this

downward adjustment is not performed.

The following table has examples of how reorder quantity gets calculated:

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 Estimated Reorder Adjusted Minimum Maximum Final
Total Minimum Maximum Fixed Lot
Reorder Quantity Reorder Order Order Notes Reorder
Available Quantity Quantity Modifier
Quantity Profile Quantity Quantity Quantity Quantity
5 10 50 45 1 order of 45 45
5 10 50 45 9 YES 45 1 order of 45 45
NO 45 1 order of 45 45
5 10 50 45 10 YES 50 1 order of 50 50
NO 40 1 order of 40 40
5 10 50 45 10 YES 50 15 25 2 orders of 25 50
1 order of 25 and 1 order of
NO 40 15 25 40
15
5 10 50 45 9 YES 45 18 1 order of 45 45
NO 45 18 1 order of 45 45
2 orders of 18 each and 1
5 10 50 45 9 YES 45 9 18 45
order of 9
2 orders of 18 each and 1
NO 45 9 18 45
order of 9
5 10 50 45 9 YES 45 18 36 1 order of 36 36
NO 45 18 36 1 order of 36 36
5 10 50 45 35 1 order of 45 45
5 10 50 45 15 1 order of 45 45
5 10 50 45 35 40 1 order of 40 40
5 10 20 15 30 60 1 order of 30 30
5 10 20 15 15 YES 15 30 1 order of 30 30
NO 15 30 1 order of 30 30
0 10 10 10 10 1 order of 10 10
0 10 10 10 5 YES 10 10 1 order of 10 10
NO 10 10 1 order of 10 10
0 -10 50 50 5 50 1 order of 50 50
-10 -5 50 60 7 YES 63 21 1 order of 63 63
NO 56 21 1 order of 63 63
-10 -5 50 60 1 order of 60 60
1 order of 50 and 1 order of
-10 -5 50 60 50 60
10
1 order of 49 and 1 order of
-10 -5 50 60 7 YES 63 49 63
14
1 order of 49 and 1 order of
NO 56 49 49
7
25 30 70 45 20 YES 60 25 50 1 order of 50 50
NO 40 25 50 1 order of 40 40
9 orders of 10.05 and 1
4.75 5.5 93.81 89.06 10.91 YES 98.19 5.03 10.05 98.19
order of 7.74
8 orders of 10.05 and 1
NO 87.28 5.03 10.05 87.28
order of 7.24

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Change in Supply calculations
The only change is a bug fix to ensure that records in
po_requisitions_interface_all that are in an “ERROR” status are
not considered as supply. Min-max inserts records into the PO interface table for
creating Purchase orders/requisitions for replenishment, and a subsequent min-max
run will detect these records and consider them as supply (provided the report
parameter “Include Interface Supply” is set to Yes). However if the
requisition import program on the PO side fails to process these records successfully,
the status changes to ERROR and they need to be purged.

Change in Demand calculations

A bug fix to the min-max report resulted in the removal of
MTL_DEMAND_OM_VIEW for sales order demand (please see bug 1636139).
This causes problems for customers trying to plan based on orders maintained on an
external order management system. An enhancement request has been logged to
restore this functionality (2368275) and documentation will be updated to reflect this
change.

Known issue with on hand quantity for lot-controlled item

Min-max uses the quantity tree API to determine on hand quantity. Because of a
limitation in the way this API currently works, for lot-controlled items the value
returned includes all inventory including lots that have expired. A future release will
correct this issue.

Restocking
Once the reorder quantity has been determined and if restocking has been turned on
(report parameter Restock must be set to Yes), min-max creates replenishment
orders (Purchase Orders, Requisitions, WIP Jobs and Move Orders) to bring
inventories up to the desired levels.

Note: If the item is set up as a repetitive planned item (“Repetitive

Planning” flag checked on MPS/MRP Planning tab of Organization Item form –
INVIDITM), then the report parameter “For Repetitive Item” must be
set to something other than “Do Not Restock”. The LOV for this parameter only
shows up if the “Restock” is set to “Yes”.

Determining Order Type and Order Source

The source type specified and whether the item is set up as a “Make” item or a
“Buy” item determines the type of replenishment order created. For organization
level min-max planning, the source type is specified on the “General Planning” tab
of Organization Item form (if this not filled in, the report uses the source type
defined on the Organization Parameters form – INVSDOIO – see the Item-Sourcing
Detail section of the “ATP, Pick, Item-Sourcing” tab).

For subinventory level min-max planning, the source type is specified on the
Sourcing tab of the Item Subinventories form – INVSDSUB. If this is left blank, the
report checks to see if a source type is specified either at the Subinventory level, the
Organization Item level, or on the Organization Parameters form.

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If the item is a Buy item and the source type is set to “Inventory” min-max creates
requisitions, if the source type is “Supplier” it creates purchase orders and if the
source type is “Subinventory” it creates move orders. Note that source type
“Subinventory” is not valid for organization level planning (it is not a valid option
on the Organization Parameters form; if used on the Organization Item form for an
item that is planned at the organization level it will not restock the item). Items must
also be transactable in order for min-max to create purchase orders, requisitions or
move orders (“Transactable” flag on Inventory tab of Organization Item form
checked).

For Make items min-max inserts a record into the WIP interface table
wip_job_schedule_interface for creating a WIP Job or Schedule for
manufacturing this item. WIP work orders cannot be generated for subinventory
level min-max planning – if a Make item is min-max planned at the subinventory
level, the report flips the flag and treats it as a Buy item instead. Also, the item must
have the “Build in WIP” flag checked (Work In Process tab of Organization Item
form), and “Pick Components” must be unchecked (Order Management tab).

Additional considerations for Purchase Orders and Requisitions

The following conditions must be satisfied before min-max can insert records into
the PO interface table:
• For requisitions (source type Inventory), internal orders are enabled for the
item (“Internal Orders Enabled” flag on Order Management tab of the
Organization Item form is checked)
• For purchase orders (source type Supplier), the item is purchasable
(“Purchasable” flag on Purchasing tab is checked)
• An Inventory AP Accrual account is defined for the organization (see
“Receiving Accounts” section of the Other Accounts tab on Organization
Parameters form)
• An Invoice Price Variance account is defined for the organization (same as
above)
• An Encumbrance account is defined. For subinventory level planning, this
can be specified at the item-subinventory, subinventory, organization-item
or organization level (org parameter form). For organization level
planning, min-max will only look at the organization-item or organization
level to find the encumbrance account
• A charge account is defined. If the “Inventory Asset Value” flag on the
Costing tab of Organization Item form is checked, then the material account
is used (for organization level planning, the material account is specified in
the Valuation Accounts section of the Costing Information tab of the
Organization Parameters form; for subinventory level planning, the material
account is specified at the subinventory level). If the Inventory Asset Value
flag is not checked, the expense account is used (for org level planning, the
expense account is defined on the Purchasing tab of the Organization Item
form, or in the Valuation Accounts section of the Costing Information tab
of the Organization Parameters form; for sub level planning it checks the
expense account defined at the subinventory level before looking at the org-
item or org level expense account)

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Min-Max and WMS
This document has been specifically written keeping Oracle Inventory in mind. Still
most of the contents and principles do apply for Oracle WMS. In a WMS enabled
organization min-max would consider quantities packed in LPN in on-hand
quantities calculation. From patch set H move orders created by Min-Max planning
will be dispatched as tasks. Other than this Min-Max would function same for both
Inventory and WMS organizations.

Debugging tips
With patchset H much of the code has been moved to the database tier. This change
has made it possible to introduce better trace messages that help in debugging. To
use this feature, set the profile “INV: Debug Trace” to Yes. - PL/SQL trace
messages are then written to the concurrent request log file. Another profile –
INV:Debug Level – controls the level of detail. Min-max writes messages at three
levels - 1,5 or 9 - with 9 being the most detailed.

A common problem that users (especially novice users) run into is when the report
completes without any output. In such cases changing the Item Selection report
parameter to “All min-max planned items” will force the report to display the item
regardless of available quantity, and allows you to investigate the issue further.

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Oracle Warehouse Management System Licence Plate Numbesrs
August 2001
Author: Aditya Bhelande, Saju David
Copyright © Oracle Corporation 2001
All Rights Reserved Printed in the U.S.A.

This document is provided for informational purposes

only and the information herein is subject to change
without notice. Please report any errors herein to
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