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How the replenishment re-order point is calculated

This is about how the re-order point is calculated in the Inventory Stock Item on the Replenishment tab. This is shown in Inventory > Processing > Replenishment > Calculate Replenishment Parameters and then applied to Inventory > Processing > Replenishment > Apply Replenishment Parameters.

It uses the following formula:

Average Daily Sales Demand * Average Vendor Lead Time.

In the example below the inventory item has the replenishment analysing the last 3 months of data, this is how MYOB Advanced would calculate the following scenario of 3 sales orders delivered and 3 purchase orders receipted over the course of March, April, May when performing the replenishment on June 1.

TotalCalculation to make the totalPart of the formula
6.52600 Qty of total sales / 92 Days (31 = May, 30 = April, 31 = March)Average Daily Sales Demand
1751 total vendor day lead time (20 days in May, 17 Days in April, 14 Days in March) / 3 (total months)Average Vendor Lead Time
110.87
Re-order Point
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