Available stock
Physical stock minus what is already promised to customers. If the warehouse holds 400 units and customers have ordered 60 that haven't shipped, 340 are available. Many ERPs export this figure directly. POplanner uses it as reported and does not take customer orders off a second time.
Incoming orders
Stock you have ordered from suppliers that hasn't arrived yet, also called open purchase orders or stock on the water. It counts towards cover, so an item with 200 in stock and 300 on the way is not reordered as if it had 200.
Average monthly sales
Units sold per month over a window of recent months, usually 6 to 12. It is the demand figure every other number is built on, so one-off orders and stock-out months should be kept out of it.
Months of cover
How long current stock lasts at the current sales rate: available stock plus incoming orders, divided by average monthly sales. 600 units at 150 a month is 4 months of cover.
Lead time
The time from placing a purchase order to having the goods available to sell. For goods from Asia by sea it is often 10 to 12 weeks including production. By air it can be 3 to 4 weeks.
Safety stock
Extra stock held for a late shipment or a busier month than expected. In months-of-cover terms it is a margin on top of the lead time, for example half a month.
Reorder point
The level at which an item needs a new order: lead time plus safety stock, expressed in months of cover or in units. With a 2-month lead time and half a month of safety stock, an item is reordered when it has less than 2.5 months of cover. POplanner's default is exactly that. See the worked example.
| Item | Lasts now | Order | Value |
|---|
Cover target
How many months of sales an order should bring the item up to. With a 5-month target, an item selling 100 a month with 150 in stock and on order gets an order of 350, before carton rounding.
Carton rounding
Rounding an order quantity up to whole cartons or inner packs, because suppliers ship full cartons. 350 units in cartons of 48 becomes 8 cartons, 384 units.
Minimum order quantity (MOQ)
The smallest quantity or order value a supplier accepts, per item or per order. It decides whether a small reorder can go now or waits for the next container.
One-off spike
A month where an item sold far more than usual because of a single event, such as a promotion order or a project. If one month holds most of a period's sales, the average overstates normal demand. POplanner suggests a safe quantity without that month and asks you to check it.
Stock-out
A period when an item was out of stock. Sales in those months are zero or low because there was nothing to sell, not because nobody wanted it. Counting them as demand lowers the next order and repeats the stock-out.
Order-by date
The last date an order can be placed for seasonal stock to reach the shop shelf in time. It is the shelf date minus the time to reach the shops, minus the lead time. Christmas stock wanted on shelves in mid-November by sea needs ordering in August.
Sea freight vs air freight
Sea freight is cheaper per unit and slow, about 12 weeks from an Asian factory including production. Air freight costs more and takes about 4 weeks. When a season's sea date has passed, air is the way to still make the selling window for the items that matter most.
Overstock
Stock far beyond what sells within a reasonable time, for example a year or more of cover on an item you reorder every few months. It ties up cash and warehouse space. POplanner marks these items "more than enough" so they are not topped up.
Purchase plan
The list of what to order from each supplier in the coming cycle, with quantities and dates. In POplanner it is the Plan screen, and the export is one order file per supplier.