All About Using Reorder Level and Reorder Amount

ShipHero makes it easier to order inventory so that a product doesn't run out. By specifying a product's Reorder Level, you can receive Low Stock Notifications when a product's inventory drops below a certain number of units. You can also use this feature to semi-automate the quantity of a product added to a new purchase order. The Reorder Amount is used to specify the increment of units to be added when a purchase order is created. Use these product settings together to streamline some of your inventory management and purchase order processes.

This article covers:

• What are Reorder Level and Reorder Amount?
• How to Edit the Reorder Level and Reorder Amount
• Creating Purchase Orders using the Reorder Level and Reorder Amount

What are Reorder Level and Reorder Amount?

• Reorder Level: The available quantity of an SKU that must be reached to trigger a low stock notification or reorder. If this is set to 0, products will only be added to a purchase order if the backorder quantity and the reorder amount exceed 0.
• Reorder Amount: The incremental quantity added to a purchase order when an SKU reaches the Reorder Level. Setting this to 0 will prevent an SKU from being automatically added to a purchase order.

How to Edit the Reorder Level and Reorder Amount

Like most product settings, the Reorder Level and Reorder Amount can be edited in several ways:

1. On the Product Details page.
2. In bulk on the Inventory Products page.
3. Using the Bulk Edit CSV.
4. Via the API.

Creating Purchase Orders Using Reorder Level and Reorder Amount

Adding the Reorder Level and Reorder Amount to an SKU does not automatically generate a purchase order. You must manually create the purchase order for the system to auto-calculate the quantities that need to be added.

Step-by-Step Instructions:

1. Open the Purchase Orders All Purchase Orders page and select Create a Purchase Order.
2. Choose the vendor and warehouse for your purchase order.
3. Click the Auto Add Backordered Products button at the top right-hand corner of the page.
4. The system will use the Reorder Level to determine the minimum quantity needed and the Reorder Amount as the incremental value for adding quantities.
5. Review the quantities and add any other information required for your purchase order processes.
6. Click Save Order.

How ShipHero Calculates PO Quantities

ShipHero uses the following algorithm to calculate the quantity added to a PO when you use the Auto Add Backordered Products button.

(Reorder Level - Available + Backorder - Amount on Order) = Minimum Quantity Needed

The system then uses the quantity specified in the Reorder Amount as an increment to reach the minimum quantity needed. In some circumstances, the total quantity added to the purchase order may exceed the minimum quantity needed, based on the Reorder Amount specified (see example 2).

Let's look at a few examples:

Example 1:

Minimum Quantity needed = Reorder Level - Available + Backorder - Amount on Order

In this example, 43 units will be added to the purchase order because the Reorder Amount is 1. When the Reorder Amount is 1, the system uses the Minimum Quantity needed as the amount added to the PO.

Example 2:

Minimum Quantity needed = Reorder Level - Available + Backorder - Amount on Order

In this example, 50 units will be added to the PO because the Reorder Amount is 10. The system uses increments of 10 to reach the Minimum Quantity Needed, so it rounds up from 43 to 50.

Example 3:

*Minimum Quantity needed = Reorder Level - Available + Backorder - Amount on Order

**In this example, 30 units will be added to the purchase order because some units are already on an open purchase order.