ANS-1000 · INVENTORY & ITEM MANAGEMENT
How NetSuite Calculates Daily Demand for Inventory Replenishment
Understanding the "Order Analysis Interval" setting is crucial for accurate inventory replenishment planning and optimizing stock levels in NetSuite.
Short answer
NetSuite calculates daily demand by summing units sold over the "Order Analysis Interval" (default 6 months). This total is divided by the interval's months for a monthly average. That average is then divided by 30 and rounded to two decimal places, yielding the item's historical daily demand rate.
Scenario
NetSuite users often need to understand the methodology behind inventory replenishment calculations to ensure optimal stock levels and efficient supply chain management. Specifically, clarity is sought on how NetSuite determines the daily demand rate for an item, which is a critical input for various inventory planning features.
Solution
NetSuite determines the daily demand rate for an item based on the 'Order Analysis Interval' setting found in Inventory Management Preferences. This setting dictates the historical period NetSuite considers for sales data. To view or modify this setting, navigate to:1. Setup > Accounting > Inventory Management Preferences2. Locate the 'Order Analysis Interval' field.By default, this interval is set to 6 months. The calculation proceeds as follows:1. NetSuite identifies the total number of units sold for the item over the specified 'Order Analysis Interval' preceding the current date. For example, if today is September 24th and the interval is 6 months, NetSuite considers units sold from March through August.2. The total units sold during this period are then divided by the number of months in the interval to determine the monthly average demand.Example: If 400 units were sold over 6 months, the monthly average is calculated as:
Total units sold / Number of months = Monthly average400 / 6 = 66.66This monthly average is subsequently divided by 30 (representing days in a month) and rounded to two decimal places to arrive at the historical daily demand rate.Example: Using the monthly average of 66.66, the daily demand is calculated as:
Monthly average / 30 = Daily demand rate66.66 / 30 = 2.22The resulting value, such as 2.22 in this example, represents the historical daily demand rate for the item.
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