Planning in Business Central #3
In this post, I will go through the various planning parameters that can be used to drive and refine the results of the planning engine.
Here’s an overview of the planning parameters that I will cover in this post.
| Parameter | Allowed Reordering Policy | Notes |
| Lead Time Calculation | Any | This is a date formula field which will determine the amount of time needed for a new supply. For example, 5D means 5 days, whilst 2M means 2 months. |
| Safety Lead Time | Any | This is a date formula field, which will add time to the Lead Time Calculation to determine the amount of time needed for a new supply. This is used to ensure there is a buffer to allow for unplanned delays. |
| Dampener Period | Order Lot-for-Lot | This is a date formula field, where we can indicate the period of time during which Business Central will mute any forward reschedule suggestions. |
| Safety Stock Quantity | Lot-for-Lot Fixed Reorder Qty. Maximum Qty. | This a decimal field, where a quantity of stock can be entered. This quantity represents the new ‘zero’. In the case of the Lot-for-Lot policy, this is the value that Business Central monitors. In the case of the Fixed Reorder and Maximum Qty. policies, if this value is higher than the reorder point, then the reorder point becomes irrelevant: each time inventory reaches safety stock, a new supply order will be suggested. If the value is lower than the reorder point, then an emergency supply order can be created to bring inventory back to safety stock, if safety stock is projected to breach. |
| Dampener Quantity | Lot-for-Lot Fixed Reorder Qty. Maximum Qty. | Specifies a quantity acting as a limit, under which insignificant quantity change suggestions for an existing supply order are blocked. So if I indicate a dampener quantity of 10, and Business Central detects a change in quantity of 5, it will be ignored. |
| Rescheduling Period | Lot-for-Lot | This is a date formula field, where we can indicate the period of time during which we wish that Business Central suggests that a supply order is rescheduled, as opposed to being cancelled and created as a new order |
| Lot Accumulation Period | Lot-for-Lot | This is a date formula field, where we can indicate a bucket of time, during which we want demand events to accumulate, in other words to be grouped together. |
| Time Bucket | Fixed Reorder Qty. Maximum Qty. | This is a date formula field, which defines how often Business Central will evaluate the inventory level during the planning horizon. For example, if I am running a plan for 01 Mar 2023 to 31 Mar 2023, which a Time Bucket of 7D, inventory level will be evaluated on 01 Mar, 08 Mar, 15 Mar, 22 Mar and 29 Mar. The time bucket is likely to cause emergency supply orders if the reorder point is too low, as a breach of reorder point can be missed for a few days, and can lead to safety stock (even if 0) being breached as a result. |
| Maximum Inventory | Maximum Qty. | This is a decimal field, used to set the maximum inventory level allowed. When the reorder point is reached, Business Central will calculate the supply order quantity needed to bring inventory back to maximum inventory. |
| Overflow Level | Fixed Reorder Qty. Maximum Qty. | Specifies a quantity you allow projected inventory to exceed the reorder point, before the system suggests to decrease supply orders. |
| Minimum Order Quantity | Lot-for-Lot Fixed Reorder Qty. Maximum Qty. | Generally known as the MOQ, this is the minimum order quantity that will be suggested on a supply order. This is used if your supplier doesn’t accept small orders, or perhaps if the cost of ordering is more beneficial over a certain level etc… |
| Maximum Order Quantity | Lot-for-Lot Fixed Reorder Qty. Maximum Qty. | This is the maximum quantity that will be suggested on a supply order. |
| Order Multiple | Lot-for-Lot Fixed Reorder Qty. Maximum Qty. | This defines the multiple in which you need to purchase an item. For example, if you buy an item in packs of 10 from your supplier, and you cannot buy part of a pack, you can then specify that your order multiple is 10. This way, a supply order will be suggested in multiples of 10. |
| Planning Flexibility | Lot-for-Lot Fixed Reorder Qty. Maximum Qty. | The planning flexibility is a setting used to stop suggestions to changes and cancel existing supply orders. |
I’ll also conclude with my thoughts on the best way to use the parameters.
Lead Time and Safety Lead Time
The lead time and safety lead time fields can be used regardless of the reordering policy selected.
When considering the Lead Time Calculation, it’s important to consider the calendar in use. If the calendar is setup with non-working days (such as weekends and holidays), these are not included in the calculation. So a lead time of a week including weekends would be 5D if the calendar excludes weekends, or 7D if it doesn’t. My recommendation is to setup calendars with non-working days, and think of the lead time in terms of “number of work days needed”.
Let’s take a look at the Lead Time Calculation. In my example, the Athens Desk is setup with a 5D lead time, and is setup with an Order reordering policy.
If I create a sales order for this item, with a shipment date of 10 Mar 2023, then the due date of the supply order will need to be 10 Mar 2023, which is a Friday. The lead time being 5D, this means that the order should be placed on 5 Mar 2023. This is a Sunday, and my calendar is setup with weekends. So the order should be placed on the first work day before that, which is Friday 3 Mar 2023.
If we take a look at the planning worksheet results, we can see the Due Date is 10 Mar 2023 and the Starting Date is 3 Mar 2023.
If I now add a 2D Safety Lead Time:
The result in the planning worksheet now considers this and the Starting Date is pushed back 2 days to 1 Mar 2023. We can also see that the Ending Date is just the Starting Date plus the lead time of 5 days.
I’m going to accept this suggestion, and create the supply order. We can see that the dates from the planning worksheet have been mapped to the purchase order line.
- Order Date = Starting Date = the date when we should place the order
- Planned Receipt Date = Ending Date = the date when we should receive the supply order according to the vendor lead time
- Expected Receipt Date = Due Date = the latest date when the inventory will be available to ship, considering the safety lead time
Dampener Period
The Dampener Period can only be used with the Order and Lot-for-Lot reordering policies. It is there to mute any small changes in schedule.
When the Due Date of the demand moves forward (i.e. to a later date), Business Central will suggest to re-schedule the supply order.
For example, let’s build on the previous example and change the shipment date on the sales order to be 13 Mar 2023.
Let’s run the planning worksheet again. I can see that Business Central suggests to reschedule my existing purchase order:
This is where the Dampener Period comes into play. To stop Business Central making meaningless reschedules, I can setup a Dampener Period.
Let’s do this and setup the Athens desk with a dampener period of 5D:
When I run the planning worksheet again, there is no result as the new Due Date falls within the dampener period.
Safety Stock
I covered the safety stock in a previous post on reordering policies. Safety stock is the ‘new’ zero (though it can be set at 0, in which case they are one and the same). Business Central will monitor projected inventory, and attempt to keep inventory levels at safety stock.
Safety stock breaches create backwards scheduled orders. This means that if a safety stock breach is expected, Business Central will suggest a supply order to cover the deficit, with a start date before the breach, to be delivered on the day of the breach. In other words, the order date will be calculated based on lead time, backwards from the expected breach date.
It is specifically important for the Lot-for-Lot policy which only monitors safety stock. But this is also monitored in the context of other policies. Here for example, I am using the safety stock in conjunction with the fixed reorder quantity policy. In this example, I have not added a safety lead time, and the lead time is set as 5D.
Today, 12 Mar 2023, I have inventory of 99 units. So let’s inject some future demand in Business Central using sales order lines with different shipment dates.
If we plot running inventory (orange) and demand (blue) over time, we can predict that that the reorder point of 25 will be reached on 27 Mar 2023 and safety stock of 10 will be breached on 03 Apr 2023, as the inventory will be 0.
When the reorder point is reached, as we know, Business Central will suggest a supply order for the reorder quantity (200) the following day, i.e. on 28 Mar. Given the 5D lead time, the supply will not be delivered until 4 Apr.
Therefore on 3 Apr, safety stock will still be breached. And as we know, when it comes to safety stock, Business Central proactively suggests supply orders to be delivered in time to avoid safety stock breach. To receive a supply on 3 Apr, considering the 5D lead time, the order must be placed on 27 Mar. And this time, as the projected inventory is 0, i.e. 10 below safety stock of 10, the supply order suggested will be for 10, to stop the safety stock breach.
If we consider the previous graph, we can see that the running inventory (orange) now remains above safety stock at all times
If we now turn to the planning worksheet, we can see that the worksheet gives the expected results:
It’s worth noting as few points here.
Even in the context of a reorder point monitoring policy, the safety stock is still monitored, and still creates a backwards supply order to stop safety stock breach. This is true even if the safety stock is set to 0. In that case, if inventory is projected to become negative (i.e. below safety stock of 0), Business Central will react in the same way and create a supply order to prevent this.
Business Central ‘plots’ projected inventory over time, and treats the events in order in which they occur (reorder point first, then safety stock in this example). This is why the worksheet presents the results in that order, even though the safety stock breach triggers a suggestion to place a supply order before the one triggered by the reorder point.
We can see that Business Central here will suggest a supply order for 10 to be placed on 27 Mar, which is way below the reorder quantity of 200. There is a setting that can be used when creating the plan to increase the amount to reorder quantity, as in practice, it is unlikely that a supply order for 10 would be appropriate.
Dampener Quantity
The Dampener Quantity is used to minimise suggestions to make changes to existing supply orders. Changes below dampener quantity are just muted.
Here, let’s take the example of a Lot-for-Lot setup with a dampener quantity of 10.
Now let’s take a look at the future demand:
If we plot this against time, we can see that safety stock will be breached twice.
To stop this, Business Central will suggest supply orders of 35 and 75 respectively to remain above safety stock.
If we run the planning worksheet, we’ll get the same result.
I will now accept the suggestions, and create the supply orders.
Now let’s modify the demand slightly. I’m going to decrease the first demand event by 3 units to increase running inventory by 3.
The graph shows that the supply order on 27 Mar will lead to being 3 units above safety stock.
If I run the planning worksheet (without a dampener quantity setup), I can see that Business Central indeed suggests to decrease the quantity of the existing supply order from 35 to 32:
If I run the same plan, but this time with a dampener quantity of 10, no change is suggested:
Rescheduling Period
The rescheduling period is used to get Business Central to reschedule existing supply orders forwards, rather than cancel them. It is useful in the case where supply orders have already been sent to a supplier, as it is generally simpler to modify an existing PO, rather than cancelling it, and providing the supplier with a brand new PO.
If we look at the previous example again, let’s remove the first demand event on 13 Mar. I’ll also remove the second supply event, leaving only a supply order in Business Central due on 27 Mar, for 35 units. So our graph now looks like the below. The supply order for 35 is now not needed, as if I removed it, the running inventory would be 99 – 25 – 50 = 24, which is above safety stock. On 3 Apr however, running inventory will become -51, 61 units below safety stock.
If I run the planning worksheet, Business Central will now suggest to cancel this supply order, and create a new one for 61 units to be delivered on 3 Apr.
Now let’s update the item setup with a rescheduling period of one week:
If I run the plan again, Business Central will now suggest to reschedule and change the quantity of the existing supply order, rather than cancel and create a new one. This is because the new Due Date is within the rescheduling period of 1W:
Lot Accumulation Period
If you consider your shopping, you can either go every day, and buy a few things where you know you’re running low, or you can go once a week, and buy what you need based on your expected requirements for the whole of the following week.
Option 2 is what the lot accumulation in Business Central is used to achieve. It allows to accumulate all demand during a given period, and consolidate it into a single supply orders at the beginning of the period.
So if I setup an item with an accumulation period of 14 days (14D), then all the demand that will happen in the 14D will be grouped together into a single supply order to cover the whole period.
Very importantly, the period starts on the day where the supply is needed, not the day on which you first run the plan, nor the day on which you place the order! Then the next period will start on the day where the next supply is needed. The periods are not continuous – they are triggered by a supply requirement!
In this graph, if we imagine a lot accumulation period of 5D and a lead time of 5D, we can see that each lot accumulation is triggered by the supply requirement. If there is no supply needed, there is no accumulation period (for example between day 11 and day 21, there is no accumulation period).
Let’s consider the following demand events in Business Central, with no existing supply orders.
If we plot this on a graph, this is what it looks like:
In Business Central, if I run the plan without a lot accumulation period, it will react to each demand even separately to keep inventory at safety stock.
It’s therefore very clear to see that the first order will be placed on 20 Mar to be SUPPLIED ON 27 Mar. If we consider a lot accumulation period of 14D, then the period will therefore start on 27 Mar and end on 10 Apr.
On 10 Apr, the projected inventory is -180, which 190 units below safety stock. Therefore Business Central will suggest a supply order for 190 units, to be delivered on 27 Mar. If we plot this, this is what it looks like, ensuring that safety stock is not breached on 10 Apr.
Looking that this graph, safety stock will be breached again on 17 Apr. This opens a new period of 14D, spanning 17 Apr to 01 May. On 01 May, projected inventory is -210, which is 220 units below safety stock. Therefore Business Central will suggest a supply order for 220 units, to be delivered on 17 Apr. If we plot this, it looks like the below, ensuring we are at safety stock on 01 May:
In Business Central, let’s set the Lot Accumulation Period to 14D:
If we then run the plan, this is the result, which is as expected:
Time Bucket
The time bucket is used with the Fixed Reorder Qty. and the Maximum Qty. policies, although Microsoft recommend not to use a time bucket with the Maximum Qty. reordering policy.
The time bucket is used to define an interval of time to wait until Business Central evaluates inventory again. The idea is that the time bucket allows you to place orders at a specific point, for example once a week, rather than at the point at which reorder point is reached. It also stops the cascading effect that can occur if an early demand changes, where all supply orders would be affected.
It is based on the starting date of the planning exercise.
If I have a Time Bucket of 5D and I start my plan on 13 Mar 23, then Business Central will evaluate projected inventory on 13 Mar, 18 Mar, 23 Mar, 28 Mar, 2 Apr etc… until the ending date of the planning horizon. In other words, it will evaluate in 5 days intervals. The number of days interval does include non work days i.e. calendars are ignored. So if your calendar is setup with non work days (weekend) then Business Central can evaluate projected inventory on a non work day.
When you use time buckets, Business Central will place a forward supply order on the day on which the projected inventory is evaluated, provided the reorder point has been reached. This is unlike using the reorder point policy without using time bucket where when Business Central detects that reorder point has been reached, an supply order is suggested the following day.
If you use a calendar with non working days, and Business Central evaluates inventory on a non working day, and inventory is at, or below, reorder point, Business Central will move forward the order date to the first work day before. So if projected inventory is evaluated on a Sunday and is below reorder point, Business Central will suggest to place an order on the previous Friday.
If Business Central evaluates inventory and makes a suggestion for a forward supply order, the quantity of that supply order is added to the projected inventory until it is delivered (i.e. during its lead time). This stops Business Central suggesting to place additional supply orders until the new supply is delivered. If during the lead time however, inventory falls below reorder point, then an additional supply order will be suggested.
Let’s look at an example. Here, I have added sales order lines for every work day from 15 Mar until 6 Apr. My current inventory is 99 PCS.
I’ve setup the item with a lead time of 5D, a reordering policy of Fixed Reorder Qty and a time bucket of 5D.
Let’s consider what might happen here. If I run the plan from 15 Mar, I know that Business Central will evaluate projected inventory on 15 Mar and then again on 20 Mar, 5 days later.
We can see that on day 1, 15 Mar, we start below reorder point: Business Central will suggest a forward order of 200 (reorder quantity) on that day, which will be delivered 5 work days later, on 22 Mar.
Business Central will evaluate stock again on 20 Mar, 5 actual day after the first evaluation. On that day, we are below reorder point, but Business Central has already suggested a forward supply order to be delivered on 22 Mar. So that supply order brings inventory to 229 So no supply order will be suggested here.
Then we can see that there is a breach of safety stock on 21 Mar, so Business Central will suggest an order on 14 Mar for 1 unit to bring inventory back to safety stock on 21 Mar, as this is before the supply order is delivered, on 22 Mar.
This is the result in the planning worksheet:
The pattern now looks like this:
If we now extend the planning horizon to include the beginning of April, let’s see the results. We know that Business Central evaluates inventory every 5 days. So the next times will be:
- 25 Mar: not below safety stock and not below reorder point. No action
- 30 Mar: below reorder point. Forward order for reorder quantity (200), due to be delivered on 6 Apr
- 4 Apr: below reorder point, but forward order due to be delivered during lead time, bringing inventory to 200 which is above reorder point. Ignore
- 5 Apr: breach oof safety stock by 20 PCS. Backward order on 29 Mar (5 work day before) to bring inventory to safety stock on 5 Apr
And the result is as expected:
Maximum Inventory
The maximum inventory is used with the Maximum Qty. reordering policy. When a supply order requirement is detected, Business Central will suggest a forward supply order to bring inventory up to maximum inventory.
If on the starting date of the plan, inventory is below reorder point, then the projected inventory from the previous day will be used in the calculation. After that, the projected inventory of the ‘evaluation day’ will be used, but the order placed the following day.
When evaluating inventory, Business Central will also check if a supply order is due to be delivered within the lead time of the item. If it is, then that supply order is added to the projected inventory. If the new projected inventory is above reorder point, then nothing happens. If it is below reorder point, then a supply order is suggested the following day for the difference between the new projected inventory, and the maximum inventory.
Let’s continue with the Athens Desk. This time, I will setup the reordering policy as Maximum Qty., with a Maximum Inventory of 150, and a Reorder Point of 100.
Today is Sat 18 Mar 2023. Let’s inject some future demand on a sales order. I currently have 99 PCS in inventory.
The demand graph will look like the below.
If I run the plan in Business Central from 20 Mar:
On 20 Mar, running inventory up to the previous day is 99, which is below reorder point of 100. So Business Central will suggest a supply order of 51 on 20 Mar, which is the maximum inventory minus projected inventory (150 – 99). This will be delivered within 5D on 27 Mar.
So this is the updated graph:
On 21 Mar, projected inventory is 59. However, a supply order of 51 is due within the lead time from 21 Mar. So the projected inventory is increased by this amount to 59 + 51 = 110. This is above reorder point, so nothing happens.
On 22 Mar, projected inventory is 39. However, a supply order of 51 is due within the lead time from 22 Mar. So the projected inventory is increased by this amount to 39 + 51 = 90. This is below reorder point, so a supply order is suggested for the following day (23 Mar) to bring inventory to maximum inventory. So the supply order quantity will be 150 – 90 = 60.
This is the updated graph:
On 24 Mar, projected inventory is -1. This is below safety stock. So a backward order is scheduled to bring inventory to safety stock of 0. The order will be on 24 Mar – 5D = 17 Mar, considering the weekend.
This is the updated graph:
If we take a look at the result in the planning worksheet, the lines are created as expected.
In this configuration, the difference between the reorder point and the maximum inventory is 50, which is below the reorder point. So this configuration will lead to regular smaller orders.
If I increase the maximum inventory, so that the difference is greater than my reorder point, then the result will be more in line with the pattern of a fixed reorder quantity. For example, I increase it to 210:
In that case, my initial supply order will be 111 (210 -99) and projected inventory + supply order within the lead time will never go below reorder point. So the graph looks like this. What will happen however, is that on 27 Mar, projected inventory will be below reorder point, so a supply order of 210 – 91 = 119 will be placed on 28 Mar.
In Business Central, the planning worksheet gives the expected result.
Overflow Level
The overflow level is the level inventory level that Business Central will allow, before suggesting a decrease in supply order.
The minimum overflow level is calculated differently depending on the reordering policy.
If the item is setup with the Fixed Reorder Qty policy, then the minimum overflow level is calculated as Overflow Level = Reorder Quantity + Reorder Point.
If the item is setup with the Maximum Qty policy, then the minimum overflow level is the value indicated in the Maximum Inventory field.
Both the above calculations can be overruled upwards by the Overflow Level field. This means that you can set an overflow value higher than the default one. You cannot set an overflow value lower than the default one. It will have no effect.
Let’s pickup from the previous example, using maximum inventory. This was the result in the planning worksheet:
I’m going to accept the recommendation and create supply orders. Accordingly, a PO is created:
I’m now going to reduce demand:
So the projected inventory looks like this now:
Looking at this graph, the projected inventory on 27 Mar is 211. The overflow level is set as the maximum quantity of 210. Accordingly, if I run the plan, Business Central will suggest that I reduce the supply order from 111 to 110.
Notice that the supply order that Business Central suggest to decrease is the one that takes projected inventory above the overflow level.
Now I am going to increase the overflow by setting the overflow level to 250.
If I run the plan again, nothing is suggested.
Now let’s look at the Fixed Reorder Qty policy. To do this, I’m deleting all the supply orders, and adding the demand again. Then I’m setting the item without an overflow level.
Running the plan gives us this, and I’m going to accept the suggestion.
However, to demonstrate the overflow, I’m going to increase the supply order manually from 200 to 250.
Projected inventory now looks like this:
I remove demand again so that projected inventory now looks like this:
Projected inventory is 350 on 27 Mar, and the overflow level is set as reorder point + reorder quantity. So it’s 100 + 200 = 300.
Accordingly, running the plan suggests to decrease the order that tips overflow over the overflow level.
I’m now going to increase the overflow level from 300 to 350:
If I now run the plan, nothing happens as expected.
Order Modifiers
The Minimum Order Quantity, Maximum Order Quantity and Order Multiple fields are not strictly planning parameters. They are order modifiers. This means that their purpose is to change the quantity ordered, rather than drive the reordering process.
Today is Sat 25 Mar and my inventory on hand is 98 PCS.
These are the planning parameters that I am using.
I have created demand as follows, using a sales order:
If I run the planning worksheet, this is the result:
Now let’s add a minimum order quantity parameter:
We can see that the supply order quantity suggested is increased to the minimum order quantity:
Now let’s add a maximum order quantity:
We can see that the pattern of supply order suggested changes, so that the maximum quantity suggested on an order is 150:
Finally, let’s add a order multiple of 150:
The original suggested quantity was 202, which is not a multiple of 150. Therefore Business Central will increase the supply order to the nearest multiple of 150, which is 300:
Planning Flexibility
The planning flexibility is not set on the item or SKU card like other parameters. Instead, it’s set on the supply order itself. The field is hidden by default, so you will need to personalise it in.
It has two possible values.:
‘Unlimited’ is the default value, and it indicates that suggestions to modify or cancel the supply orders are ok.
‘None’ is the opposite. It means that Business Central should not make any suggestions to modify or cancel the supply order.
In other words, ‘None’ suppresses action messages for existing supply orders.
This is very useful if your suppliers have restrictions on changes or cancellations of supply orders. It is also very useful in the context of a manufacturing environment, where the short term production plan has been done, and where you want to fix it so that no changes are suggested.
You can set the planning flexibility on different types of supply orders.
Purchase Order lines:
Assembly Order headers:
Transfer Order lines:
Production Order lines:
Conclusion
Planning parameters can be really powerful allies in ensuring that the supply orders suggested by Business Central make sense for your business.
Fixed Reorder Quantity Policy
I recommend using the Fixed Reorder Quantity policy only where demand is quite stable and predictable, for low value items, for which you don’t mind carrying extra inventory. I recommend you don’t use a safety stock quantity. Instead, be sure to set the reorder point to a higher value than the expected demand during lead time. This will allow for unplanned demand events to be manageable. If you use time buckets, increase the reorder point further by the expected demand during the time bucket. This is to ensure you don’t breach safety stock. Generally, the reorder quantity value will drive the minimum order quantity and should be set at the minimum as the MOQ, so it’s not usually useful to set an MOQ with this policy. Likewise, the order multiple and maximum quantity values are rarely useful, as the suggested orders will generally be for the reorder quantity. It may be useful to set an overflow level to a higher value than the standard value, especially if you use the ‘Respect Planning Parameters for Exception Warnings’ feature when calculating the plan. But I’ll cover this in another post.
Maximum Quantity Policy
The maximum quantity policy works in exactly the same way as the fixed reorder quantity policy. The only difference is the quantity suggested on the plan. I recommend using the maximum quantity policy only where demand is quite stable and predictable, and where you have storage limitations or want to limit the amount of inventory you carry. In order to avoid to have many small supply order suggestion, the maximum inventory should be set so that the difference between the maximum inventory and the reorder point, is greater than the reorder point. I recommend you don’t use a safety stock quantity, and set a higher reorder point. If your supplier has ordering restrictions, then an MOQ, maximum quantity or order multiple may be useful to use. But using these parameters may lead your inventory to exceed the overflow level, so it is usually useful to increase the overflow level if you use these parameters.
Lot-for-Lot Policy
The Lot-for-Lot policy is a just in time policy, where only the safety stock is monitored. This policy aims to limit the inventory on hand, and proactively suggests supply orders to stop safety stock breaches just in time. As a result, this is the policy where rescheduling, cancelations and quantity changes suggestions are most likely. Therefore the policy is usually used with a dampener quantity and period, a lot accumulation period and a rescheduling period to limit immaterial suggestions for supply orders or changes to existing supply orders. It is also the policy where the order modifiers tend to be the most useful, especially the MOQ and order multiple parameters. This policy tends to be the most versatile, and is the most commonly used policy, especially if you are unsure which policy to use. Unlike the fixed reorder quantity and maximum quantity policy, it is also generally used with a demand forecast, which I’ll cover in another post. This is because the fixed reorder quantity and maximum quantity have an implied demand included in the reorder point: it’s the expected demand during the lead time. In contrast, the Lot-for-Lot policy reacts to actual demand, and so a forecast is generally used to inject future demand in Business Central.