Introduction

This document provides an explanation and examples for setting up and switching to Min/Max Inventory calculations.

Procedure

If the lab wants to use Min/Max, then there are 2 choices.

Change the setting for the lab’s complete lab inventory for all manufacturers by using the General Configuration table (Optifacts Menu Option 9-1-1), as shown below.
Change the setting by manufacturer by using the Manufacturer Configuration table (Optifacts Menu Option 9-1-2), as shown further down in this document.

We recommend starting with 1 manufacturer at a time.

General Configuration

The General Configuration table (Optifacts Menu Option 9-1-1) maintains the default setting for how the system orders lenses. If there is nothing set up for a specific manufacturer (Optifacts Menu Option 9-1-2), then Optifacts defaults to the General Configuration.

In the case below, the lab setting is to order based on Usage. That means the system won’t use the Number of Days Supply and Ordering Cycle values. In Usage mode, if the lab uses 1 lens, then the system re-orders 1 lens. The Number of Days Supply and the Ordering Cycle only gets considered if the Order by Usage setting is “M” for Min/Max.

Manufacturer Configuration

The Manufacturer Configuration (Optifacts Menu Option 9-1-2) overrides the General Configuration for the specified manufacturer. A table must exist for each manufacturer that you want to use Min/Max.

Number of Days Supply for Stock Computation - Will affect how many lenses are ordered based upon how many days between orders and what the usage levels have been.

This number is considered the minimum value of Min/Max.

Number of Days Between Normal Ordering Cycles - Will also affect how many lenses are ordered based on the Number of Days Supply for Stock Computation and what usage levels have been.

This number added to the previous value is considered the maximum value of Min/Max.

Example: The lab wants to keep 7 days’ worth of stock on the shelf and uses a 3-day ordering cycle. That means that every 3 days, the system calculates and creates an order based on the quantity on hand and the minimum and maximum quantities it is supposed to keep on the shelf for 7 days. Min/Max alters the minimum and maximum values based on actual usage of the lens.

Basic Explanation:

First, the SKU must be a Stocked lens (setup in Optifacts Menu Option 9-1-10). Min/Max won’t calculate Non-stocked lenses.

If you have a specific SKU set up as “C” Compute, with a minimum of 2 and a maximum of 4, the system calculates the minimum on the shelf to be 2 x 7 days = 14 lenses and the maximum to keep is 4 x 7 days = 28 lenses. If there are more on hand than the maximum of 28, it won’t order until the stock level reaches below 28.

Min/Max does not calculate at the SKU level alone. You must set the whole manufacturer to use Min/Max. Then, you can set specific SKUs to “C” Compute and others to “M” Manual. The system won’t calculate Min/Max for the SKUs set to “M,” and it won't order any lenses marked as Non-stocked.

If you set the Manufacturer Configuration to “M” Min/Max, does that mean that all lenses within the specified vendor start using the Min/Max process?

Yes, it applies to all lenses within the specified manufacturer. However, you can get around this using 1 of the 2 options described next:

Set the lenses that you do not want on Min/Max to “M” for Manual Calculation in Optifacts Menu 9-1-5. Any SKUs marked as “M” won’t use Min/Max. Since the Manufacturer Configuration has to be “M” Min/Max in this case, and you only want to mark select lenses to use Min/Max, all lenses for the specified manufacturer need to be “M” for Manual Calculation. Then you could go in and change the few SKUs you want on Min/Max to “C” Compute.
You could leave all the Stocked SKUs set to “C” Compute, and set all lenses to a minimum and maximum qty of 1 not to get ordered. Then set the minimum and maximum quantity on only the SKUs you want to use Min/Max at a higher number.

Remember: All Non-stock lenses won’t get ordered so they can be left alone.

Extensive Explanation:

We maintain the date first used for each SKU on the system.

If the date first used is less than 100 days, we look at the inventory configuration for the number of days between Min/Max calculations. We take the difference between today, the date first used, and the number of days configured for Min/Max. We take the number used in that time (basically the time since last Min/Max calculation) and create an average daily usage, which we’ll use below.
If the date first used is 100 days or more, but less than 365, we count the number of days month-to-date. We’ll add 30 for each of the last three months and divide that number into the number used in that period to get the average daily usage.

We don’t subtract out weekends or holidays. It’s a simple calculation using 30 days for each month and counting each day of the month to date.

3. If the date first used is over 365, we add days month-to-date, 30 days for each of the last two months, and 30 days for this same month last year. We add usage during these same periods and divide usage by days to get average daily usage.

4. Now that we have average daily usage as calculated by one of the methods above, we multiply that number by the configured value above for the number of days’ supply. That gives us a minimum value. For example, if average daily usage is 20 lenses, we’ll multiply that by the 4 we have configured above to set your minimum at 80 lenses.

5. We then take the average daily usage and multiply that by the number of days between ordering cycles. As configured above, we’d be multiplying the 20 used per day times the 3 days between ordering cycles to get 60. We’d add this 60 to the min to get the maximum of 140. So, min would be 80, and the maximum would be 140.

If any SKU has extremely low usage and you list it as a stocked item, we have an override to the formula that can ensure that you keep at least one lens on the shelf. That can be configured to be one pair for a product that’s non-distinguishable. For example, if you rarely use a ‘special’ polarized single vision, but you’d like to keep it stocked, you can configure the system to ensure either one lens or one pair be on the shelf at all times. Some labs prefer one lens, but some labs prefer two because orders typically come in for a pair.

Optifacts does not factor in lead-time for delivery. You need to factor that into the number of days of supply for suppliers that have a significant lead time.

When the system calculates orders, we look for any SKUs where the sum of quantity on hand plus quantity on order has dropped below the minimum. We’ll then order up to the maximum. For example, if you have 30 lenses on the shelf and 20 on order, the sum of 50 would be below the 80 we calculated for the minimum. We’d re-order (140 (-) minus 50) or 90 lenses to get us back up to the maximum.

We also allow you to control any given SKU manually, so you can set that SKU to have manual Min/Max settings where you key in these values, and we would not override these with the Optifacts Min/Max calculations. That is highly valuable if you have minimal usage history and know the product might be a big seller in the coming days/weeks.

Stop a Specific SKU from Re-ordering Until it has Reached a Set Stock Level

Example: SKU 0209447853

Remember: Setting only specific SKUs to “C” Compute Min/Max won’t work unless the Manufacturer Configuration table or the default General Configuration is “M” for Min/Max. The Min/Max process works by doing a calculation based on Manufacturer Configuration first, and then it looks at the SKU level. So, if you have an SKU set to “C,” the Manufacturer Configuration table must be set to “M.” Otherwise, it just defaults back to the General Configuration, and if that setting is “U” for Usage, then the SKU setting is ignored.

As shown in our example above, this particular lens has too many on the shelf. We want to stop the system from ordering lenses until it has reached a certain quantity on hand.

Inventory Transaction Entry

From the Optifacts Main Menu:

Select Manu Options 9-1-7 - Inventory Transaction Entry

The Inventory Transaction Entry screen is displayed.

Enter the following information:
- Trans Type – Enter the letter ‘K’ into this field.
- Trans Date – Leave as today’s date.
- Tray/Order # - Enter past this field.
- Default Quantity (Y/N)?
  - Enter ‘N’ in this field so that you can set the quantity you want. The system won’t re-order until it reaches the quantity on hand that you specify.
  - Entering ‘Y’ sets the quantity to 1. The system won’t re-order until it is down to 1 on-hand.