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 Feature
of the Month
February 2004
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AUTO MIN/MAX
UTILITY |
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The Auto Min/Max utility proposes minimum and maximum levels based on
user-defined formulas and each item’s sales history. Different formulas
can be used to calculate the proposed levels for different locations,
regions, departments, vendors, styles, etc. In addition, formula
records can contain multiple formulas, each applicable to a different
sales volume.
For example, you can instruct Auto Min/Max to calculate min levels equal
to 60 days of supply and max levels equal to 90 days of supply if the
item falls within a certain sales range, or min levels equal to a
quantity of 15 and max levels equal to a quantity of 30 if the item
falls within a different sales range, and so on.
Upon review and acceptance, the proposed levels can be adopted as the
active levels in inventory.
The basic steps for auto-generating min/max levels are as follows:
1.
DEFINING THE
FORMULA and filters to be used to propose min/max levels.
2.
ANAYLZING
SALES with a date range that will successful propose min/max levels.
3.
CALCULATING
PROPOSED MIN/MAX levels using the filters, formulas, and sales history
created in steps 1 and 2.
4.
REVIEWING
proposed levels, and adjusting formulas/sales analysis as needed.
5.
UPDATING inventory min/max levels.
Follow the directions in the next few pages to make use of one of the
most powerful tools that Retail Pro has to offer. Be aware of the
instructions for either version 8.x or 7.x
If
you need help at any time, doesn’t hesitate to use the F1 HELP or to
call BHD training and schedule an appointment at (916) 368-1070.
NOTE: It is
suggested that you have a good year’s worth of sales before using the
Auto Min/Max utility. This is to ensure that Annualized Sales or Days
of Supply values accurately affect your forecasted sales period. |
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DEFINING THE
FORMULA |
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The key to defining
successful formulas is to know what you are looking for beforehand.
A few questions to ask yourself:
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What date range
will my min/max values cover? Will they be monthly, seasonal, or
yearly quantities? |
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What values are the
best indicators of my plans? Are Days of Supply (DOS), % Increase,
Annual estimated quantities, or manually set values going to help me
the most?
Creating the
formula is the easy part….finding the numbers to get you there is
the tough part.
To create a Formula
in VERSION 8.x:
1.
Open the
Auto Min/Max utility by clicking on MERCHANDISE from the main
menu, and then Auto Min/Max from the sidebar menu.
2.
Once the
Auto Min/Max utility opens, click the icon from the sidebar menu
labeled FORMULA. Then click the NEW icon at the top
left of the main menu.
3.
Assign
the formula a NAME. For multi-store users, use the column on
the right side to check off applicable stores this formula will be
applied to.
OPTION: You can also create and assign a FILTER to this formula.
This is useful when looking to set Min/Max values for only certain
Departments, Vendors, Season Codes, etc. If NO filters are created
the formula will be applied to ALL items in inventory.
4.
Take note
of the two windowpanes, the top to define Min values and the bottom
for Max values. Address each value separately. Use the
illustration and examples below for more detail.
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Use a conditional GREATER or LESSER of to maintain control of
your formula. |
If you want to
include a specific quantity in your formula, enter the quantity in
the Qty field. |
If
you want to include annualized sales in your formula, check this
box. |
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Define a range
for annual sales. With the use of these fields, one formula record
can contain multiple formulas, each applicable to a different sales
volume. |
If you want to
include Days of Supply in your formula, enter the number of days’
worth of supplies to be considered in the DOS field. Otherwise,
accept the default value in this field (zero) to disregard this
field. |
If you want to
include the annualized sold quantity increased or decreased by a
specific percentage in your formula. Using this is like forecasting
an increase/decrease from the analyzed sales date range |
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Below are
EXAMPLES of retailers who…
Want their MIN
values to be based on there always being 30 days of supply in the
store, or a Min of 1 for items which did not sell during the
analyzed sales period.
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Want their MAX
values to be no larger than 45 days of supply, a 15% increase in
this year’s annualized sales, or ONE (1) for items which may not
have sold during the analyzed sales period. |
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Want items with
a lower sales volume (from 1-99 qty sold) to have a MAX value equal
to last year’s annualized sales, but items with a higher sales
volume (above 100 qty sold) to have a max value based on annualized
sales PLUS a 25% increase. |
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To create a
Formula in VERSION 7.x:
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From the main
screen in Retail Pro, click on UTILITIES.
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Select MIN MAX,
and at the bottom select either Company or Store Min/Max values.
Specify the Store if necessary.
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Select FORMULA at
the bottom of the screen.
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Select ADD.
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Enter a store or
CMP and an optional DCS and VC.
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Define the MIN and/or MAX formulas. For each formula first enter the annualized sales range the formula is to be applied to. Then write the formula for each range using DAYS OF SUPPLY and/or a SPECIFIED QUANTITY. (See above examples)
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ANALYZING
SALES HISTORY |
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Formulas
typically calculate min/max levels for each item based on days of
supply. For example, in order to know the quantity required for a
60-day supply, Auto Min/Max needs to be able to predict the rate of
sales for the next 60 days. This prediction is made by analyzing
the rate of sales for some period in the past and assuming that the
rate will be the same in the future.
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The accuracy of
this method depends strongly on choosing an appropriate period for
the sales analysis, i.e. a period whose sales will be a good
predictor of future sales. That period can be different for
different items, such as would be the case for seasonal or new
merchandise. Using the filter provided you can run separate
analyses spanning different time periods, each applied to different
merchandise. |
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To
Analyze Sales in VERSION 8.x:
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From the main
screen in the Auto Min/Max utility, click the icon from the
sidebar menu labeled SALES.
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From the top,
select the applicable date range. Use the dynamic date range by
clicking on the icon to the far right. Be aware that the date
range selected has a great bearing on the DOS (Days of Supply)
field in the formula. Make sure to pick a date range applicable
to the sales you are expecting.
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Use the filter
below to include/exclude certain items. For multi-store users,
use the column on the right side to check off applicable stores to
be analyzed.
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Click START
from the top of the sidebar menu. After the analysis is complete
you will be returned to the main screen of the Auto Min/Max
utility.
To Analyze
Sales in VERSION 7.x:
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From the main
screen in the Min/Max utility, select SALES at the bottom
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Specify the
starting and ending dates for the analysis.
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Use the filter to
select the merchandise to be included.
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Select YES to
optionally include lost sale invoices in the
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analysis.
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Select SAVE.
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CALCULATING
PROPOSED MIN/MAXs |
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To Calculate
Proposed Min/Max Levels in VERSION 8.x:
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From the main
screen in the Auto Min/Max utility, click the icon from the
sidebar menu labeled CALC.
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In the ACTIVE
FORMULAS window, place above the horizontal bar the formulas you
want ran to propose min/max levels.
(Either drag & drop or double-click to move formulas
above or below the horizontal bar.)
Run the
formulas in the order they need to run. The top one runs first.
Filter formulas should run last.
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For multi-store
users, use the column on the right side to check off applicable
stores to be analyzed.
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Click the START
icon from the top of the sidebar menu.
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To Calculate
Proposed Min/Max Levels in VERSION 7.x:
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From the main
screen in the Min/Max utility, select CALC at the bottom
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Define optional
filter criteria. Press END to continue.
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RPRO will
calculate and display the NEW MIN and/or NEW MAX levels.
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REVIEW &
UPDATE |
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To Review &
Update in VERSION 8.x:
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Once the
Calculation has been ran, in the main screen of the Auto Min/Max
utility review the proposed NEW MIN & NEW MAX levels. Edit the
quantities by , or CLEAR the proposed levels, edit your formula or
sales analysis and recalculate as needed.
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When all NEW MIN
and NEW MAX values are as desired, click UPDATE from the sidebar menu. This final step makes all changes permanent in
Retail Pro.
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To Review &
Update in VERSION 7.x:
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Review the update
New Min and New Max columns. Use EDIT to change any of the
proposed levels or add others.
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From the main
screen in the Min/Max utility, select UPDATE at the bottom
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Define optional
filter criteria. Press END to continue.
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Select QTYS ONLY
to overwrite the current MIN and MAX levels only if the new value
is not zero.
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Select ALL to
update all items. This could result in some currently non-zero MIN
MAX levels being overwritten by zeros.
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