Summary
This article walks through what max stock and preferred max stock are and how they are calculated.
Applies To
All items in StockIQ that have an order policy of order point
Process
Max Stock, or sometimes "Max Inventory", is the highest recommended level that you allow stock for an item to reach.
There are two different values - Max Stock, and Preferred Max Stock.
Both of these values are calculated using your safety stock, and Cycle Stock, which includes factors like Economic Order Quantity, forecast error, and order cycles.
Preferred Max Stock EXCLUDE supplier-related factors like minimums (MOQ's) and multiples so that you can differentiate between what your ideal max level would be, and the max level enforced upon you due to supplier limitations.
The calculation looks like this:
Max Stock = SafetyStock + Cycle Stock
Preferred Max Stock = Safety Stock + Preferred Cycle Stock
Max Stock is therefore the number beyond which you should not expect to ever see your inventory above during normal ordering and demand behavior, incorporating your supplier constraints.
When you are over Max Stock, StockIQ says you are "Over Stocked" (unless you're far enough over to be considered in Excess).
Troubleshooting
Common Mistake
The statistical Max Stock is not the same as an order-up-to target quantity (often referred to as your "Max") in the Min/Max order policy. If you select min/max order policy and do not provide a order-up-to max target, StockIQ can fall back on using the Statistical Max Stock, but more often these are separate values, and are displayed in separate columns within StockIQ. You will see different columns for these two values throughout the application, such as in the Order Policy detail tab in Inventory Snapshot, or Place Orders step 2 columns.