Replenishment Terminology in Sage 500

The Replenishment features in Inventory Management allow you to determine the appropriate quantity to purchase from a vendor based on current stock status, purchase and selling history, and projections. Here is the terminology used in Sage 500 to help you better understand it:

  • Demand – Projected future usage for an item
  • Working Days – Number of business days in an inventory period
  • Daily Demand – Estimated daily demand for an item
  • Projected Lead Time – Number of days needed to replenish an item
  • Safety Stock – Provides protection against a stock out
  • Order Point – Minimum level of inventory to be maintained
  • Past Usage – Weighted average of the actual past usage of an item
  • Trend Factors – Expected increases or decreases in the demand for an item
  • Replenishment Position – Quantity needed to fill all obligations
  • Target Order – Vendor requirements for ordering product
  • Order Cycle – Average number of days to use enough product to meet a vendor’s target order
  • Line Point – Additional items that should be included in a target order
  • Total Cost of Inventory – Includes all costs associated with acquiring inventory (i.e., purchase price, replenishment cost, carrying cost)
  • Replenishment Cost – All expenses associated with processing a purchase order line
  • Carrying Cost – All expenses incurred maintaining stock
  • Economic Order Quantity (EOQ) – The purchase quantity that results in the lowest total cost
  • Min/Max Reorder Method - Items are ordered when the replenishment position falls below the Minimum Stock value and enough items are ordered to bring the stock up to the Maximum Stock value
  • Maximum Reorder Method - Orders items when the replenishment position falls below the Maximum Stock value
  • Manual Reorder Method - Items are excluded from the replenishment process and Purchase orders are manually entered