The next step is to run the report, Print Purchase Order List, to display the pre-order list the previous process has created. You may want to also run the report, Pending Inventory Transactions. The Pending Transactions report shows, for each product, the quantities used to determine the reorder quantity. A fragment of this report is shown below.
Pending Orders
Product Qty Avail. Reorder Point Order Qty Type Qty Scheduled Date
01c010 76 100 15 PO 20 01/12/87
01c015 3 10 5 None
01c050 20 10 5 None
01c055 109 100 50 OE 55 02/05/87
02c010 0 8 12 None
02c012 10 10 10 PO 10 02/15/87
The quantity available is equal to the quantity on hand less the quantity committed. This differs from the stock level quantity calculated in the previous step. The Make Purchase Order List process calculates the stock level as the quantity on hand less both the quantity committed and the quantity outstanding. It does this because it assumes that any outstanding Order Entry orders are to be filled soon and inventory must be restocked now so that the orders can be filled.
The last three columns of the report display information about pending purchase orders and outstanding Order Entry orders. The type field refers to either pending purchase orders (PO), or outstanding Order Entry orders (OE). If the type field displays "None", there are no outstanding Order Entry orders or pending purchase orders for the product. The scheduled date for pending purchase orders specifies the date the order should be received. This date represents the shipping date for outstanding Order Entry orders. If the scheduled shipping date for an outstanding sales order is not in the immediate future, you may not want to restock inventory for the order at this time. In this case you would edit the purchase order list to prevent restocking for that sales order.
The Pending Inventory Transactions report shows how the reorder quantities are derived. You may want to print a copy of the Vendor Price List to display the vendors and prices the list was made from.
The Purchase Order List report displays nine columns of information. The following fragment of the Purchase Order List report shows the first seven columns; the last two columns of the report are shown later.
Purchase Order List
Product Vendor Vendor Spec. Vendor Units Each Total Price Product Units
01c010 19 units required. No listing for required quantity in vendor price file.
discount h05400 hfw-wh-02389 80 0.31 229.80 20
01c015 o01350 hbc-1984-0234 12 50.50 606.00 12
discount h05400 hfc-ch-0145 50 49.95 2,497.50 50
01c055 s15700 sfc-cus-0087 96 29.25 408.00 96
discount h05400 hfw-wh-02389 20 21.00 420.00 100
02c010 20 units required. Product not listed in vendor price file.
02c012 h05400 hfc-ch-09872313 80 41.50 3,320.00 20
No discount
The first three columns on the Purchase Order List report display the product code, vendor code, and vendor specification from the vendor price file. The Vendor Units column displays the reorder quantity in vendor units (product units ¸ u/m). The price per vendor unit is shown in the Each column. Total Price is the product of Vendor Units and Each. The reorder quantity in product units is displayed in the next column.
The report fragment above also shows that a message is printed if a price cannot be found for the required reorder quantity or, if the product is not listed in the vendor price file. The reorder quantity displayed in the messages is in product units since no vendor can be found. In these two cases a purchase order must be entered manually for the product.
The last two columns of the report fragment are shown below.
Product Unit Cost Lead Time
01c010
discount 1.24 5
01c015 50.50 2
discount 49.95 5
01c055 29.25 2
discount 29.20 5
02c010
02c012 166.00 5
No discount
The Unit Cost field displays the unit cost per product unit. The last column is the lead time in days.
The report also lists a discount price, if it can find one, for each product. The discount price requires that more than the required reorder quantity be ordered. Although the Unit Cost of the discount price is less than the Unit Cost of the "best price" chosen for the required reorder quantity, the Total Price is usually greater. The Make Purchase Order List process chooses as the discounted price, a price that results in the lowest possible Total Price.
Now the Purchase Order List should be examined to see if any changes need to be made. Any of the specifications (vendor, vendor specification, vendor units, price, or lead time) for a product order may be changed.