Demand by SKU and location, in consistent units; Usable stock, commitments and dated inbound receipts; Actual lead time, MOQ, packaging and service target

Practical supply planning guide · Procurement

How much to order and when: a purchasing guide

A practical planning guide with an illustrative calculation, operating checks and a path from recommendation to approval.

Short answer

Calculate net requirements from demand during the protection period, safety stock and inventory position. Apply minimum orders and packaging multiples only after checking the need.

First scope

Start with one SKU and location, then validate the policy on a representative product group.

When to review

Recalculate at each planning review and whenever lead time, demand or confirmed receipts change.

Typical buyer

Supply chain, demand planning, procurement and inventory teams.

Calculation and decisions, step by step

Define the protection period

For periodic review, cover lead time plus the interval until the next review. Use the same unit for demand and time.

Owner: Planning and procurement
Output: Documented calculation and approved decision

Calculate inventory position

Add usable stock and confirmed inbound receipts within the horizon; subtract outstanding commitments not already included in demand. Exclude damaged stock and avoid counting orders twice.

Owner: Planning and procurement
Output: Documented calculation and approved decision

Work through the quantity

Illustrative constant-demand example: 10 units/day, 12-day lead time, 7-day review interval and 40 safety units require 230 units. With 100 usable units and 30 inbound, and no additional commitments, net need is 100. A 120-unit MOQ and packs of 24 produce an order of 120. Confirm that the extra 20 units fit storage and cash limits.

Owner: Planning and procurement
Output: Documented calculation and approved decision

Approve the purchase

Check supplier reliability, shelf life, available cash and safe surplus at other locations before approving an ERP purchase order.

Owner: Planning and procurement
Output: Documented calculation and approved decision

Readiness checklist

Demand by SKU and location, in consistent units
Usable stock, commitments and dated inbound receipts
Actual lead time, MOQ, packaging and service target

Common mistakes

Treating sales during stockouts as complete demand
Counting customer orders twice
Using an average lead time without checking variability

Questions to ask vendors

Can I review inputs and edit a recommendation before approval?
How are purchases and transfers returned to my ERP?

Success metrics

Fill rate: units fulfilled / units requested
Stockout days by SKU and location
Inventory value and excess inventory
Recommendation-to-approval time

Where SOBERAN fits

SOBERAN connects demand, inventory, purchasing constraints and human approvals. Review a real SKU-and-location workflow in a demo to confirm data and ERP integration scope.

Talk to SOBERAN