Here is the help detail that answers most of your questions.  The calculation will deduct past due orders from the inventory on hand to determine if the order point will be tripped, once the order point is triggered, the proposal will be executed according to the settings.  If the open purchase orders are within the current leadtime for the part they will be considered.  I don’t think forecasts are considered, but I don’t have experience with that aspect.

Perform Order Proposal

Explanation

The order proposal is used by a purchaser or planner to study the demand for inventory parts using planning method B - Order Point System, or planning method C - Refill Level.

It is also possible to create and delete purchase requisitions, shop order requisitions and create purchase orders and distribution orders. The supply type on the inventory part determines whether a purchase order or a purchase requisition will be created by the order proposal. A distribution order will be created instead of a purchase order if the primary supplier for the part has Multi-site Planned Part selected. The requisitions that can be deleted must have been created by the order proposal.

Some of the fields in the planning data that affect the order proposal are:

• Planning Method - For a part to be processed by the order proposal, the planning method must be B or C.
• Safety Stock - May be zero, but must be less or equal to the order point.
• Order Point - May be zero, but must be less or equal to the lot size.
• Lot Size - Only used for planning method B. Must be greater than zero (0). If a quantity is proposed by the order proposal it will be a multiple of the lot size. For example, the lot size equals 10 and the quantity needed is 12, the quantity proposed will be 20.
• Manufactured/Acquired Split - The order proposal quantity could be split in accordance to the Manufactured/Acquired Split percentage as defined on the inventory part. If this split is used, one split quantity will be sent to manufacturing on a shop order requisition and the other split quantity will be sent to purchasing on a purchase requisition, purchase order or distribution order.

The Advanced feature enables you to specify additional selection criteria for records that will be included in the order proposal. For example, delete old requisitions, create requisitions/orders, and process manufactured orders.

The Default feature allows you to use the default settings for this activity. Default settings are derived from the Database Tasks window set by the administrator. 

Note 1: Order proposal calculations only include standard inventory (i.e., project inventory balances are excluded).
Note 2: If the available quantity is below the specified safety stock, the Order Proposal Planning functionality may still create duplicate supplies / supply proposals (i.e., when converting the generated requisition to purchase order with the due date falling within the purchase lead time).

Prerequisites

• The inventory part must use planning method B - Order Point System, or C - Refill Level. This can be checked on the Inventory Part/Planning Data tab.
• The part must exist in standard inventory.
• To have a distribution order created, the supply type must be Order, and Multi-site Planned Part must be selected for the primary supplier of the part.

System Effects

The system effects vary depending on which settings you have indicated.

• If the Create Requisition/Order check box is selected, purchase requisitions/orders, shop order requisitions, or distribution orders will be created for the parts that are processed. To decide which orders should be created, the Lead Time Code in the Inventory Part/Acquisition tab is considered. To decide whether purchase order requisitions, purchase orders or distribution orders should be created, the Supply Type field on the Inventory Part/Planning Data tab is considered.
• If the Delete Old Requisitions check box is selected, the purchase requisitions and shop order requisitions that were created previously, but have not been converted to orders by the order proposal feature as yet, and the distribution orders still in the Planned status will be deleted.
• If the Process Purchased Parts check box is selected, purchase parts will be included in the calculation of the order proposal.
• If the Only Parts with Inventory Activity check box is selected, the order proposal will exclude parts that do not have any activity since the last order proposal review for the parts in question. Reserve, issue, move, receive, scrap, return parts, change planning data, or create pallets for parts are considered as activities performed on inventory parts.
• If the Calculate Planning Data Before Creating Order Proposals check box is selected, planning data will be calculated for selected parts prior to creating an order proposal.
• If the Process Manufactured Parts check box is selected, the manufactured parts will be included in the calculation of the order proposal.

@BeaIoanaC 

Hi Ioana,

I don’t know about the report or where it might appear.

Using Planning Methods B or C without also Creating a requisition or an order seems not compatible to me.  It leads to process failures as the setup of the part planning indicates it is managed, but without an order or at least a requisition, there is only manual work to get to the next needed action.

I’ve never tried leaving the settings without the create supply option enabled as it wouldn’t make sense to the users.

Shawn

Hi @ShawnBerk , @Marcel.Ausan , when you have a  Supplier Manufacturing Lead Time set and the Supplier Confirms with Differences ( Promised Delivery Date changes- superior to Wanted Delivery Date) the Order Point will generate a new demand even if the one ongoing it will be just late. Do we have a way to take into account the ongoing confirmed PO’s without generating new ones? Normally we don’t need the system to generate other demands if the supply is confirmed. Thank you for your help!

@AlinaM normally I would try as much as possible to use MRP relevant planning codes as MRP engine seems to work quite nicely and is considering supply which is confirmed.

On the purchase order, there are three different date fields that can and should be used differently to accurately track when you ‘wanted’ it versus when it was ‘promised’ compared to when it is ‘planned’ to be available.  There are actually two date fields for the planned receipt/arrival (their use depends on whether you are doing inspection and counting transport).

All Buyer’s would like to use and update just one date field, but to make everything work well, at least two if not three of the above need to be managed well to clearly communicate to the users as well as to both the MRP and Order Proposal algorithms what the available supply really is.

There is a bit more explanation in this thread:

existing PO promised date

Our problem with trying this was the Buyers - they weren’t diligent about updating the Promise date.

If you are tight with monitoring, confirming, and maintaining the PO dates, then this algorithm might work as intended.

It is worth trying it out if you think your Procurement department maintains the POs well.