Hi
I am confused by what I have found online and the learning pass in terms of how demand and supply planning works in Netsuite.
Can you please confirm the following is correct:
- Demand planning is a way to forecast expected demand for an item. This is then used to calculate a supply plan.
- A Supply plan is used to decide how much to reorder or how much to produce of a particular item and when.
- A demand plan can be calculated based on past sales or usage data of an item (historical data) or on forecasted sales (opportunities, quotes or sales orders).
- For 3., the historical data can be analysed based on linear regression (trends); moving average; or seasonal averages. You would need to set the time frame for the forecast to be calculated (e.g. data from the past 6 months)
- For 3., if you choose to use forecasted sales, the forecasted sales value is not projected based on past transactions or usage. Instead, this is based on transactions that exist in the system (opportunities, sales orders and quotes). You can specify which transaction types to include.e.g. including quotes though not opportunities.
- A supply plan takes into account safety stock and lead time in calculating recommended quantities to order or make
- For assembly items, demand and supply planning is done at the top level of the assembly. The plans include the component items or sub assemblies by default in the item quantities to order or make.
Also, in addition to the above, I have seen Materials Requirements Planning (MRP) and Master Production Schedule (MPS) being mentioned as "replenishment methods".
a. How do these fit into demand and supply planning?
b. Is MRP taking the place of "time phased planning"?
c. when would you use the MRP method vs MPS? for example, for components of an assembly item, would you use MRP? And for the assembly item itself, used the MPS method?
d. Where does the reorder point on item records fit into this? Is that just a basic replenishment method which gives you reminders of when to reorder without indicating what quantities to reorder?
e. Once you select a replenishment method on an item, can this be changed?
Thanks
