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--- reports:purchasing [2024/07/26 04:21] – [mSupply's better algorithm] Louisa Wong
+++ reports:purchasing [2024/08/12 01:41] (current) – [Report output] Louisa Wong
@@ Line 155: / Line 155: @@
 Step 5:
 We can now calculate the Adjusted AMC with the formula:
-Square root[(Days in stock)/(Days in the month)] * Consumption
+Square root[(Days in month)/(Days in the stock)] * Consumption
 We check this individually for each month that has not been excluded.
 So, if the "Days in month" = "Days in Stock", the square root of this = 1.
@@ Line 167: / Line 167: @@
 For the Adjusted AMC = 267.87/8.8 months = 30.34 units per month.
-Note: If all months have been excluded due to the first or second exclusion criteria, then the typical AMC calculation will automatically be used instead.
+**Steps Summarised:**
+Step 1: Adjusting by % Days in Stock
+  * Set threshold for fully stocked (e.g., 90%)
+  * Exclude months with < 90% stock
+Step 2: Calculate Typical AMC
+  * Use months not excluded in Step 1
+  * Calculate Typical AMC = (Total consumption of only months included in Step 1)/(Number months usage basis)
+Step 3: Automatic Exclusion for Low Stock
+  * Exclude months with < 33% days in stock
+Step 4: Compromised Stock Level Check
+  * Set threshold (e.g., 100% of typical AMC)
+  * Exclude months below threshold
+Step 5: Calculate Adjusted AMC
+  * Apply formula to each included month = Square root[(Days in month)/(Days in stock)] * Consumption
+  * Sum the results
+Step 6: Final Adjusted AMC Calculation
+  * Divide total consumption by number of months
+  * Calculate Adjusted AMC
+Note: If all months have been excluded due to the first or second exclusion criteria, then the typical AMC calculation will automatically be used instead.
 ==== Report options ====
@@ Line 247: / Line 270: @@
   * Number of months in stock : Calculated by ('Effective SOH') / ('Adjusted AMC'). This gives the number of months the current stock will last based on adjusted consumption rates.
-  * Ordered Quantity used : Calculated by ('Stock on order') - ('Back order'). This is the quantity of stock that will be received after accounting for all back orders.
+  * Ordered Quantity used : This is how much of the stock you have ordered that you will actually need to use, based on how much you use each day and how much stock you already have (Note: forecast calculation will affect this). This is determined by:
+         * Calculate the "usage per day of stock" = AMC / 30.4375
+         * Multiply "usage per day of stock" with the "total number of days in your months stock required" to get "Total usage required" = Usage per day of stock x Total number of days in your months stock required
+         * Calculate your "Future stock on hand" = Stock on order + Effective SOH - Backorder
+         * Subtract "Total usage required" from "Future stock on hand" to get the "Net stock difference to be used" = Total usage required - Future stock on hand.
+         * This value ("Net stock difference to be used") now determines the "Ordered Quantity used".
+                 * If the value is a negative value and there is "Stock on order", add the "Net stock difference to be used" with "Stock on order" = "Net stock difference to be used" + "Stock on order"
+                 * If the value is a positive value and there is "Stock on order", if "Net stock difference to be used" is greater than "Stock on order", the "Ordered Quantity used" will be the same value as the "Stock on order" as all the stock on order will be used up.
+  * Suggested Order calculated by:
+     * If expected delivery date has not been adjusted: ('Months stock required' x 'Adjusted AMC') - ('Effective SOH' - 'Stock on order') + 'Backorder'.
+     * If expected delivery date has been adjusted, this will be accounted for as it will only look at the stock required from date of expected delivery to the end of months stock required:
+         * Usage per day = Adjusted AMC/30.4375 (which is from 365.25/12 which is days in the full year)
+         * Suggested order quantity = Usage per day x Days needed (which is 'Expected delivery date' - End date of the 'Months stock required', or days needed in total - days of lead time) - ('Effective SOH' - 'Stock on order') + 'Backorder'
-  * Suggested Order : Calculated by ('Months stock required' x 'Adjusted AMC') - ('Effective SOH' - 'Stock on order') + 'Backorder'. This determines the quantity of stock that needs to be ordered to maintain the desired inventory levels after considering current stock, back orders, and stock already on order. Note: if you are using the "Minimum stock" function, the suggested order will also take this into account to ensure that there is enough stock to meet this value. This will be calculated by taking the minimum pack size to cover the minimum stock.
+  * This determines the quantity of stock that needs to be ordered to maintain the desired inventory levels after considering current stock, back orders, and stock already on order. Note: if you are using the "Minimum stock" function, the suggested order will also take this into account to ensure that there is enough stock to meet this value. This will be calculated by taking the minimum pack size to cover the minimum stock.
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