Supply chain | Supply Chain Management, Commerce

Planned Purchase Orders are too high and cover the wrong demand

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Posted on by albinreiter

Hi master planning experts!

I have a question / problem and I hope someone can explain it to me. D365 creates planned purchase orders which are too high; consequently our stock is too high.

This is the net requirements screen as it is calculated:

Reference	Requirement Date	Requirement Quantity	Accumulated	Covers…
Planned Purchase Order	11-Nov-20	193	193	--> Sales Order 001 and Sales Order 002
Sales Order 001	11-Nov-20	-190	3
Purchase Order	12-Dec-20	400	403	--> Sales Order 003 and Sales Order 004
Purchase Order	28-Dec-20	170	573	--> Sales Order 005 and Sales Order 006
Sales Order 002	01-Jan-21	-3	570
Sales Order 003	01-Feb-21	-300	270
Sales Order 004	01-Mar-21	-100	170
Sales Order 005	01-Apr-21	-100	70
Sales Order 006	01-May-21	-70	0
Planned Purchase Order	01-Jun-21	60	60	--> Sales Order 007
Sales Order 007	01-Jun-21	-60	0

In my opinion Dynamics shouldn't try to cover the first sales order with a planned purchase order, because there are already POs in the system which should cover that demand. In my opinion the net requirements SHOULD look like this: The rule should be to cover all demands with existing PO in the first place and then cover demands with planned purchase orders.

Reference	Requirement Date	Requirement Quantity	Accumulated	Covers…
Planned Purchase Order	11-Nov-20	190	190	--> Sales Order 001
Sales Order 001	11-Nov-20	-190	0
Purchase Order	12-Dec-20	400	400	--> Sales Order 002 and Sales Order 003 and SO 004
Purchase Order	28-Dec-20	170	570	--> Sales Order 004 and Sales Order 005 and SO 006
Sales Order 002	01-Jan-21	-3	567
Sales Order 003	01-Feb-21	-300	267
Sales Order 004	01-Mar-21	-100	167
Sales Order 005	01-Apr-21	-100	67
Planned Purchase Order	01-May-21	63	130	--> Sales Order 006 and Sales Order 007
Sales Order 006	01-May-21	-70	60
Sales Order 007	01-Jun-21	-60	0

The major problem is that we get too much inventory on stock in the first place (in this example 3 pcs).

my coverage group settings:

code: period, coverage period: 92, coverage time fence: 500, negative days: 0, positive days: 500, consume on-hand inventory before all other supplies

my master plan settings:

Include on-hand inventory: yes, include inv transactions: yes

no minmum stock settings or something else

Please feel free to share your opinion!

best regards,

Albin

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Gabriel Sotiriu on at

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RE: Planned Purchase Orders are too high and cover the wrong demand

Hi,

With reference to the initial given scenario, I have run a test on a Contoso (standard) environment with release 10.0.15 (but not sure if it is important) for a plain newly defined item and I think I got the results you were expecting.

The item has used the Req item coverage (with a Coverage code = Requirement) for which I have only extended the coverage period to accommodate with later demands, but no change against the StaticPlan or Master planning parameters.

Please, check below screenshots for some additional details.

1. Item setup:

2. Item coverage group setup:

3. Planning result after update against StaticPlan:

Note that plan time fences are all disabled:

If you do not have a Contoso environment available, then please please try to look a little bit on the Item coverage setup and the Plan setup.

I hope this will help.

Best regards,

Gabriel
albinreiter 25 on at

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RE: Planned Purchase Orders are too high and cover the wrong demand

Hey!

thanks for your quick reply. Yes, that's true about negative days, but in my case I would like to cover the second demand (3 pcs on 1st of January 21) with an existing purchase order. Therefor my first planned purchase order should have the quantity of 190 pcs and ONLY cover the first sales order. ...and not the first and the second.

I hope this is understandable. :)
Suggested answer

Guy Terry 28,695 Super User 2025 Season 1 on at

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RE: Planned Purchase Orders are too high and cover the wrong demand

Hi Albin

I think your negative days setting is having the biggest impact on what you are seeing. One way to describe this parameter is 'how late can I be to fulfil this demand', although other more complicated explanations are available!

In this case, you would need to set negative days to something like 31 days to allow Master planning to use your PO on the 12th Dec to fulfill the SO demand on the 11th Nov.