This procedure recalculates the usage totals and suggested reordering information for products. It is performed automatically for a single customer (or all the customers assigned to a corporation) when you print a Customer Catalog, or for all products to which a customer ID is assigned in FILES|Products.

Background

Why Do I Need To Calculate Usage?

As we have discussed, most of Simple Accounting functions in real time. For example, the on hand and on order quantities of a given product are always correct the moment you invoice a customer or close a Purchase Order.

However,some elements of inventory control cannot be determined in real time. For example, monthly usage for a given product must recalculated every time a month by month usage report is run.

How Usage Is Calculated

Usage is calculated in two different ways, based on the FMS checkbox for each product:

• If FMS is checked then usage is calculated strictly based on counts and releases. If you are not taking regular counts this will not be accurate.
• If FMS is not checked then usage is determined based exclusively on sales invoices. If the customer orders 5,000 of a product twice in the past year, then the program will calculate that the average annual usage is 10,000 and suggest reordering 5,000 every six months.

Reordering And Depletion

When the product needs to be reordered and when it will be depleted are calculated in three different ways, but each way includes the Reorder Lead Time field:

• If the Reorder Every XX Days field is filled in then the next reorder date is based exclusively on this number, the last sale of the product to the customer, and the reorder lead time. So if the last sale was five months ago and the Reorder Every XX Days field is 180, and the Reorder Lead Time field is 30, then the product will be flagged for reordering when you next print an Items to Be Reordered Report.

  
Number of Days Since Last Sale 150

  Reorder Lead Time 30

  ======

  180


  This gives you thirty days to reorder the product.

• If FMS is Checked then reordering is calculated based on counts and releases you have entered in Counts and Releases. If you are not taking regular counts this will not be accurate.
• If FMS is not Checked then reordering is determined based exclusively on sales invoices. If the customer orders 5,000 of a product twice in the past year, then the program will calculate that the average annual usage is 10,000 and suggest reordering 5,000 every six months.