Summary
This article walks through how Large Regular Pull safety stock is calculated.
Does not apply to
Large Regular Pull is disabled when:
- Actuals in the last six months are less than a certain percentage of actuals from the last year. This prevents keeping safety stock artificially high when the demand is dropping off precipitously.
- The item is highly seasonal
- The item's usage is less than .05 per day (around 1 a month)
For more discussion on the various options and filters, see the Default Statistical Safety Stock options topic.
Process
Large Regular Pull safety stock is calculated by looking at the demand history for an item, and looking for a pattern of repeated, large purchases.
For example, if you have an item with a normal demand rate of around 100 units a month, StockIQ will calculate a sensible safety stock based off of normal factors. However, if, every few months a customer comes in and purchases 1000 units, any normal safety stock calculation will be insufficient - that buy will stock you out, leaving the customer dissatisfied, and your other customers upset as well.
Large Regular Pull works by looking over recent history, usually the past 18 months, and will choose the 3rd largest single purchase as a reasonable target for stocking (this is configurable). So, StockIQ would see this repeated pattern of large 1,000 unit purchases, and would suggest you stock to that level to cover this type of large, repeated demand.
When examining for Large Regular Pull, StockIQ will also look at your Typical Order Quantity, and the resulting safety stock will be the greater of either the Nth largest recent order, or your typical order quantity. (The Typical Order Quantity is displayed in the Safety Stock Tab as well).
If you create events specifically against a sales order, or if sales orders are marked as Exceptional in the feed from your ERP, they are excluded from consideration among the "large pulls", so you can "event-out" certain sales if you wish.
IMPORTANT: When you add an event against a sales order, you must wait until the next refresh of StockIQ before that sale is removed from consideration by Large Regular Pull