Reorder Levels and Reorder Quantity

Business Stock

It is important that a business maintains sufficient stocks to meet customer needs, at any point of time. This also means that it is important not to accumulate stocks that don’t sell. Reorder level is the quantity of stock beyond which the stocks have to be replenished or By defining the Reorder levels and Reorder Quantities in Tally.ERP 9, you can ensure that you never run out of stocks.

To decide on reorder levels for stock items consider the following:

● The lead-time for suppliers to deliver the stock.

● The delivery time specified by the customer.

● The stock-in-hand to satisfy existing orders.

In simple mode, Tally.ERP 9 accepts the quantities that you want to specify. In advanced mode, it considers the previous consumption patterns to suggest reorder levels. However, you can define your own reorder levels. You can also specify the minimum quantity of the item to be ordered, either in simple or in advanced mode.

The purpose of specifying reorder levels is to obtain a report that indicates the quantity of a stock item that you must order.

Enable reorder level feature

1. Go to Gateway of Tally F11 F2 .

2. Set the option Enable purchase order processing to Yes.

Now the option Reorder Levels will appear in the Inventory Info. menu.

Specify Simple Reorder Level and Minimum Quantity

Reorder quantity is the quantity that has to be maintained in stock at any given point of time. If the stocks go below the reorder quantity, an order has to be placed for the same. This indicates the minimum quantity to be raised for a stock item in each order. The required quantity may be less than the minimum reorder quantity. Reorder and minimum order quantities are defined on the basis of fixed consumption patterns.

For example , if the reorder quantity is set to 10 numbers, and the minimum order quantity is set to 15 numbers, then when the stock balance reaches 9, then an order has to be placed for the stock item to reach at least 15 numbers.

1. Go to Gateway of Tally Inventory Info. Reorder Levels .

2. Select Stock Groups > select a group from the List of Groups .

3. Enter the required Reorder Quantity and the Minimum Order Quantity of each stock item in the Specify Reorder Levels screen

4.  Press Enter to save.

Specify Advanced Reorder Levels and Minimum Quantities

Advanced reorder levels and minimum order quantities have additional parameters applied to meet dynamic consumption patterns. Advanced configuration helps in the calculation of reorder level or order quantity based on total consumption recorded previously.

1. Go to Gateway of Tally Inventory Info. Reorder Levels .

2. S elect the stock group under the Reorder Levels menu. The Simple Reorder Levels screen appears.

3. Click : Adv Reorder to view the Advanced Parameters for Reorder Level .

4. Enter the Period (type the number and select the period as required).

5. Select the Criteria , as required. The Specify Reorder Levels screen appears

6. Click M : Adv Min Qty to view the A dvance Minimum Order Quantities .

7. Enter the Period (type the number and select the period as required).

8. Select the Criteria , as required. The Specify Reorder Levels screen appears

9. Press Enter .

10. Specify the advanced parameters for all stock items, if required.

11. Press Enter .

12. Press Enter to save.

Source: Tally

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