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Back-orders vs. Lost-sales

  • 1.  Back-orders vs. Lost-sales

    SILVER CONTRIBUTOR
    Posted Jul 09, 2019 04:45 AM
    Dear all,

    I am somehow new to AX 2012. Now I am trying to implement MRP for a company active in retail industry. I have realized that the MRP algorithm considers the stock shortage as back orders and tries to satisfy it lately. I am aware that I can use Negative Days in the Item Coverage. However lets consider that the negative days in set to zero and today I am planning for the following week and the lead time is set to 2 days. According to the business context, today and tomorrow's demands should be missed as Lost-sales since if I place an order today, it will be received on the day after tomorrow. But the algorithm considers their demand in the placed order and so they are not lost-sales but back-orders. Is it kind of configuration and setup?
    Your help is truly appreciated.
    Kind regards,
    Mohammad

    ------------------------------
    Mohammad Gholami
    Ofogh Koorosh
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    Conference-AXUG_200x200


  • 2.  RE: Back-orders vs. Lost-sales

    TOP CONTRIBUTOR
    Posted Jul 10, 2019 08:42 AM
    Hi Mohammad,
    You are correct, open orders in the past are just shortages not lost sales. If the order lines were cancelled, the demand would be removed, and the next time MRP runs, it would not try to fulfill it. If it remains open, it is a backorder. MRP can use the Positive and Negative days to determine if a planned order should be created to fulfill demand or if the existing orders and inventory already can fulfill it.Then Actions messages and Futures (called "Calculated delays" in D365FO) then offer suggestions of how to manipulate or edit orders based on changes in supply and demand.
    Hope this helps, let me know if you have additional questions.

    Thanks
    Drew

    ------------------------------
    Andrew Lencsak
    Solution Architect
    DXC
    GA
    ------------------------------

    Conference-AXUG_200x200


  • 3.  RE: Back-orders vs. Lost-sales

    SILVER CONTRIBUTOR
    Posted Jul 13, 2019 01:56 AM
    Thanks Andrew,

    So, you mean I have to cancel the missed orders manually and again run MP? but, in our case, there is a high number of missed orders and it is a bit hard to manually track and cancel them. Can we use Action messages to track and modify them? Is there any descriptive examples on future messages and actions?

    Your help is truly appreciate.


    ------------------------------
    Mohammad Gholami
    Ofogh Koorosh
    ------------------------------

    Conference-AXUG_200x200


  • 4.  RE: Back-orders vs. Lost-sales

    GOLD CONTRIBUTOR
    Posted Jul 11, 2019 01:27 PM
    ​Are you trying to leave the cancelled order lines in the system so that you can report on lost sales?

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    Kevin McLean
    Strategic Solutions NW, LLC
    Beaverton OR
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    Conference-AXUG_200x200


  • 5.  RE: Back-orders vs. Lost-sales

    SILVER CONTRIBUTOR
    Posted Jul 13, 2019 01:59 AM
    Hello Kevin,

    Actually we do not know in advance which orders are going to be missed and after running MP we figure out which of them are lost-sales.

    ------------------------------
    Mohammad Gholami
    Ofogh Koorosh
    ------------------------------

    Conference-AXUG_200x200


  • 6.  RE: Back-orders vs. Lost-sales

    TOP CONTRIBUTOR
    Posted Jul 12, 2019 08:40 AM
    Hi Mohammad,
      If you have the Retail config keys enabled, and a call center set up / taking Retail sales orders, you can use the Automatic Notification and Cancellation policies to automatically cancel these missed sales, and then MRP will not consider them.

    More info here:
    https://docs.microsoft.com/en-us/dynamicsax-2012/appuser-itpro/set-up-notification-and-cancellation-for-delayed-orders

    ------------------------------
    Colby Gallagher
    Manufacturing Systems Consultant
    Agility Business Solutions
    Brecksville OH
    ------------------------------

    Conference-AXUG_200x200


  • 7.  RE: Back-orders vs. Lost-sales

    SILVER CONTRIBUTOR
    Posted Jul 13, 2019 02:06 AM
    Hi Colby,

    Thank you for your response. It was so helpful :-)

    ------------------------------
    Mohammad Gholami
    Ofogh Koorosh
    ------------------------------

    Conference-AXUG_200x200


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