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Administrator Guide
Last Updated: 2023-06-23
Calculate Par Recommended Reorder Point

Calculate Par Recommended Reorder Point

Security: These domains in the Inventory functional area:
  • Manage: Par Inventory
  • Security:
    Reports: Par Inventory
You can configure Workday to calculate a recommended reorder point for your par items to reduce manual data review. We enable you to make frequent adjustments to minimum and maximum stocking quantities based on your usage activity, which improves your demand forecasting and anomaly detection.
When you don't enable decimal stocking quantities for the par item and unit of measure combination, Workday rounds recommended par levels and reorder points to whole numbers. If the item isn't a purchase item, Workday rounds the item level to a whole number.
  1. Access the
    Calculate Par Recommended Reorder Point
     task.
  2. As you complete the task, consider:
    Option Description
    Par Company
    Select the company to record par transaction accounting entries.
    Location Hierarchy
    Enables you to calculate suggested par levels and order points for multiple par locations. You must have access to the specific location hierarchy to select it.
    Reorder Calculation Type
    Current ADU
     uses the average daily usage for the par item, on the par inventory site, in the base unit of measure. This method is best for:
    • New items with no history.
    • Items with inconsistent usage.
    Previous Horizon
     uses the number of transactions during the time period that you configure on the
    Previous Horizon Days
     and
    Days to Include
     prompts. Best for items with consistent usage.
    Seasonality and Trend
     uses historic year-over-year data to calculate trend and seasonality. Best for seasonal items with consistent usage.
    Reorder Manual Adjust %
    Enter a percentage multiplier to add to your recommended reorder point. Example: Make a 20% adjustment for a seasonal rush of inventory usage.
    Use Lead Time
    Select to use the configured
    Preferred Supplier Lead Time
     value from the Inventory Site options on the purchase item, in your reorder point calculation.
    Use Target Days on Hand
    Select to use the minimum amount of par inventory you want to have on hand, measured in number of days of stock for the item in your calculation.
    Update Par Level
    Select to update the stock level for the par items.
    Update Reorder Point
    Select to update the reorder point on the par items to the value recommended by the task.
    Exclude Critical Items
    Select to exclude items from planning or automatic updates. Use this option for items that needs to maintain a minimum quantity regardless of historic demand.
    Reorder Tolerance %
    When you configure Workday to update your reorder point, you can enter a tolerance percentage. Workday automatically updates your reorder point only when it falls within the percentage you configure. When you leave the field blank, Workday updates all reorder points with the recommended values the task generates. Example: You enter in 25% and the current reorder point is 100, so the recommended reorder point must be between 75-125 to update.
Workday provides the recommended reorder point of the par item in the replenishment UOM.
Workday calculates these fields for your par items:
  • Adjusted Average Daily Usage, which equals the
    Average Daily Usage
     plus ((
    Average Daily Usage
     multiplied by the
    Reorder Manual Adjust %
    ) divided by 100).
  • Reorder Point, which equals the Adjusted Average Daily Usage multiplied by the (
    Lead Time
     plus the
    Target Days On Hand
    )) plus the
    Safety Stock
    .
  • Recommended Max Quantity, which equals the
    Average Daily Usage
     multiplied by the (
    Max Targeted Days on Hand
     plus the
    Lead Time
    ) plus the
    Safety Stock
    . Workday converts the value to Replenishment UOM before adding the safety stock value.
You can use the
Recommended Par Levels
 report to view replenishment details by par inventory site and par item.