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How to Create a Purchase Order Using Reorder Level and Reorder Amount

ShipHero makes it easier to order inventory ahead so that a product does not run out. By specifying a product's Reorder Level, you can receive automatic notifications when a product goes below a certain amount of units. By setting a Reorder Amount, you can specify in advance the number of units added to a new purchase order when the Reorder Level is reached.

Definitions

  • Reorder Level: the "Available" value an SKU must reach to trigger a reorder. If this is set to 0, products will only be added to a purchase order if the backorder quantity and the reorder amount exceed 0.
  • Reorder Amount: the incremental quantity added to a purchase order when an SKU reaches the Reorder Level. Setting this to 0 will prevent an SKU from automatically being added to a Purchase Order.

How to Set a Reorder Level

  1. Go to Inventory > Products, select the product, and click the small pencil icon in the top-right corner of the product's Details.
  2. Scroll down to the Reorder Level and set the amount to the minimum # of units you want to have before receiving an alert to add the product to a Purchase Order.
  3. If the Reorder Level is higher than the Reorder Amount + Available, the system will use the Reorder Level as the number of items in the Purchase Order.
  4. If the Reorder Level is lower than the Reorder Amount Available, the system will use the Reorder Amount as the number of items in the Purchase Order.

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How to Order Ahead Using Reorder Amount

  1. Go to Purchase Orders > All Purchase Orders > Create a Purchase Order.
  2. Select the vendor and warehouse you are creating the purchase order for.
  3. To add the products identified in your Low Stock Notification, use the Auto Add All Backordered Products button at the top right-hand corner of the page.

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  4. The system will use the Reorder Amount to automatically determine the minimum quantity needed for each product to reach the Reorder Level.
Note: If your Reorder Amount exceeds 1, ShipHero will increment the order quantity on the purchase order by that amount until the Reorder Level is reached.

How ShipHero Calculates PO Quantities

ShipHero uses these simple rules to calculate the quantity added to a PO using the Reorder Level and Reorder Amount:

  • (Reorder Level - Available) = Minimum quantity needed to be ordered
  • Actual quantity ordered must be an increment of the Reorder Amount

Example 1

If the Reorder Amount is 1, ShipHero will add the minimum quantity needed to the Purchase Order to reach the Reorder Level.

  • Reorder Level: 100
  • Reorder Amount: 1
  • Available: 57
  • Min Qty Needed: (100 - 57) = 43

Because the Reorder Amount is 1, ShipHero will simply add 43 units to the PO when the Auto Add Backordered Products button is used.

Example 2

If the Reorder Amount exceeds 1, ShipHero will use that value to increment the quantity on the Purchase Order until the Reorder Level is reached. In the example below, the Reorder Amount is 10, which means that the Purchase Order could be for 10 units, 20 units, 30 units, and so forth.

  • Reorder Level: 100
  • Reorder Amount: 10
  • Available: 57
  • Min Qty Needed: (100 - 57) = 43
  • Nearest increment that reaches min qty: 50

In this case, 50 units will be added to the PO when the Auto Add Backordered Products button is used.