Min-Max Planning

By
Dinesh Kumar
 Agenda
 Inventory Planning and Replenishment
 About Min-Max
 Profiles used by Min-Max planning
 Reorder Quantity Calculation
 Min- Max planning parameters
 Min-Max Planning,
– Organisation level
– Subinventory level
– Example
 Min-Max setups and Simulation
 Tables involved

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Inventory Planning & Replenishment methods

Oracle inventory manage your inventory

levels using any combination of the system’s
planning and replenishment
features,including
– Min-Max Planning
– Re-order point Planning
– Replenishment Counting
– Kanban Replenishment

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Inventory Planning & Replenishment methods

• It involves answering two questions,

• When should you place a new order?

“Total Available Qty” < Min Qty
• How much you should order?
Maximum Qty – Total Available

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 About Min-Max planning

Min-Max planning is to maintain inventory

levels for all of your items or selected items.
We specify minimum and maximum inventory
levels for our items with min-max planning
Suggests a new purchase requisition,internal
requisition,move order to bring the on-hand
quantity back to the maximum when it goes
below the minimum.

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 Profile used by Min-Max planning
 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).

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 Profile options continued………
 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 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

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 Reorder Quantity Calculation
Reorder
Quantity ?

Yes No

Total Available Total Available

< Minimum >=Minimum
for Item for Item

How much to Reorder ??? If Min and Max order

Reorder Quantity = No quantities specified then
Maximum Stock able Fixed Lot Multiple consider them for reorder
Qty – Total Available Defined? qty calculation
Yes

Take the INV_ROUND_REORDER_

Arrive at a final reorder
QTY profile values
quantity
in consideration

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 Min – Max planning parameters

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 Organization Level Min-Max Planning

Total Available= Quantity on hand + Supply – Demand

Supply Demand

Inventory balances, Purchase Sales orders, WIP job component

requisitions, Internal requisitions, requirements, and Account issue move
Internal sales orders and WIP jobs orders

• Oracle inventory offers the options to consider net demand(s) by passing

the value Yes/No against them.
• Net Demand parameters are - Net Reserved Orders, Net Unreserved
Orders, Net WIP Demand, Non-Nettable inventory quantities

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 Organization Level Min-Max Planning
 NET Demand Options: If Set NO
 Total available = Nettable Qty on Hand + On Order

 NET Demand Options: If Set YES

 Total available = Nettable Qty on Hand + On Order–“Open Demand”

Where,
• Nettable Qty on Hand = sum of the quantities on hand for the item
across all the nettable sub inventories within your organization
• On Order = sum of all requisitions(purchase/internal),
orders(purchase/internal) and WIP jobs
• Open demand = Sum of unreserved sales orders, inventory reservations,
reserved sales orders, account issue move orders and WIP component.

If Total available < Minimum Quantity then

Order quantity = Maximum Quantity – Total available

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 Sub inventory Level Min-Max Planning

Total Available= Quantity on hand + Supply – Demand

Supply Demand

Inventory balances, Purchase Sales orders, Account issue move orders

requisitions, Internal requisitions, and sub inventory transfer move orders
and move orders scheduled ship from this sub inventory

• Oracle inventory offers the options to consider net demand(s) by passing

the value Yes/No against them.
• Net Demand parameters are - Net Reserved Orders, Net Unreserved
Orders, Non-Nettable inventory quantities

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 Sub inventory Level Min-Max Planning
 NET Demand Options: If Set NO
 Total available = Nettable Qty on Hand + On Order

 NET Demand Options: If Set YES

 Total available = Nettable Qty on Hand + On Order–“Open Demand”

Where,
• Nettable Qty on Hand = is the quantity in the sub inventory you
specified in the Min-Max planning report
• On Order = sum of all requisitions(purchase/internal),
orders(purchase/internal) and sub inventory transfer move orders to
the specified sub inventory
• Open demand = Sum of inventory reservations( including reserved sales
orders), account issue move orders and sub inventory transfer move
orders scheduled to ship from specified sub inventory.

If Total available < Minimum Quantity then

Order quantity = Maximum Quantity – Total available

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 Example
• Assume an item has the following quantity values and item attribute setting
• Nettable Qty on hand = 25
• Open supply quantity = 50
• Open demand(reserved SO qty) = 100
• Min-max minimum quantity = 100
• Min-max maximum quantity = 500

Description NET Demand = No NET Demand = Yes

Total Available 25+50 = 75 (25+50) – 100 = (-25)

Below Min Qty(100) ? Yes Yes

Order Qty (Max Qty – Total Available) 500 – 75 = 425 500-(-25) = 525

Assumption – supply/demand is within the cut-off date

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Min-Max Setups and Simulation
At Sub inventory level

– Create XYZMMX1 as sub inventory level min-max planned

item with source type of sub inventory
– Receive 1500 units of XYZMMX1 into org M1, sub inventory
FGI
– Receive 10,000 units of XYZMMX1 into org M1, sub
inventory stores
– Setup M1 to automatically approve move orders
– Run Min-Max to create the replenishment move order

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Continued…….

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Continued…….

Inventory
Supplier
Sub
inventory

You are specifying item

to be planned at sub
inventory level

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Continued…….

Miscellaneous Transactions - Receipt

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Continued…….

Create a move order requisition for 1000 units of XYZMMX1

from sub inv FGI to Store sub inv

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Continued…….

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Continued…….

Replenish-
-ment
Qty
9500

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Continued…….

Created a
Replenishment
move order

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Min-Max Setups and Simulation
At Organization level

– Create XYZMMX2 as org-level min-max planned

item with source type of supplier
– Receive 1500 units of XYZMMX2 into org M1,sub inventory
FGI
– Setup M1 to automatically approve move orders
– Run Min-Max to create the purchase requisitions

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 Continued…..

You are specifying your item to be planned at the Organization

level with a replenishment type of supplier.

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Continued…..

Item assigned to org M1

Miscellaneous Receipt

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Continued…..

Created a move order Issue for 1000 units of XYZMMX2

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Continued…..

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Continued…..

We should have on on-hand quantity of 1500 with an outstanding demand of 1000 on an org-level due to our
move order of transaction type of move order issue. Therefore, the report should show replenishment

quantity of 9500 and should automatically create a purchase requisition to fulfill the replenishment.

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Continued…..

After running Min- Max record has been inserted into Interface table

Run Requisition import program which created a Purchase Requisition for replenishment.

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 Major Tables involved

 PO_REQUISITIONS_INTERFACE_ALL
 WIP_JOB_SCHEDULE_INTERFACE
 MTL_SYSTEM_ITEMS_B
 MTL_ITEM_SUB_INVENTORIES
 MTL_PARAMETERS
 MTL_SECONDARY_INVENTORIES

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 Thank You!

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