Planning policy settings
A planning policy is how you tell the engine to treat one item: made or bought, in what order sizes, with how much lead time and how much buffer. An item with no policy is skipped by every run — not planned with defaults — so the policy is where planning starts.
This page is the full list. For the walk-through of creating and editing one, see Set item planning policies.
Where these settings live
Go to Manufacturing → Planning → Policies, then ADD POLICY, or the pencil on an existing row.
Two fields on the dialog are not settings but scope:
- Product — which item the policy is for. Set on Add Policy only.
- Warehouse — which warehouse the policy applies to. Default — all warehouses is the item-level policy; naming a warehouse creates an override that wins there. This field is read-only when editing, so a policy cannot be moved between scopes after it exists — delete it and add it again in the scope you meant.
The dialog shows a field only when something reads it. Choose Economic Order Quantity and the two EOQ cost fields appear; choose Days of Supply and they are replaced by one. That is why the list below is longer than any policy you will actually fill in.
Every setting
Seventeen settings have an on-screen label. Planning Method and Lot Sizing Rule are required; the rest are optional, and an empty field means the engine reads nothing there.
| Setting | What it does | When it's relevant |
|---|---|---|
| Warehouse | Scopes the policy to one warehouse, or to the item everywhere. A warehouse override takes precedence over the item default. | Always. Set on Add Policy only |
| Planning Method | How supply is planned for the item. Defaults to MRP. | Always — required |
| Procurement Type | How planned supply is created: built, bought or moved. Defaults to Make. | Always |
| Lot Sizing Rule | Turns a shortage into an order quantity. Defaults to Lot for Lot. | Always — required |
| Lead Time Source | Where the engine reads the item's lead time from. Defaults to From Supplier. | Always |
| Lead Time (days) | Days from releasing an order to receiving it. The run subtracts it from the due date to get the release date. | Typed when Lead Time Source is Manual; every other source falls back to it |
| Safety Stock | A buffer the plan keeps on hand. It is treated as a floor: the plan orders so projected stock never drops below it. | Any method except where Reorder Point replaces it as the floor |
| Reorder Point | The stock level that triggers replenishment. When projected stock falls to it, the engine plans an order. | Planning Method of Reorder Point or Min / Max, or a Lot Sizing Rule of Min / Max |
| Reorder Up To Level | The target level to replenish back to — the "max" in Min / Max. | Same as Reorder Point |
| Order Minimum | The smallest quantity you can order, such as a supplier minimum. Any planned order is raised to at least this. | Every lot-sizing rule |
| Order Multiple | Rounds order quantities up to a multiple of this — a pack or case size. With a multiple of 50, a need of 120 becomes 150. | Every lot-sizing rule |
| Order Maximum | The largest quantity allowed in a single order. A bigger requirement is split across several planned orders. | Every lot-sizing rule |
| Fixed Order Quantity | The batch size the Fixed Order Quantity rule orders in, repeated as often as the shortfall needs. | Lot Sizing Rule of Fixed Order Quantity |
| EOQ Ordering Cost | What it costs to place one order whatever its size — raising the order, receiving, inspection, freight admin. A higher figure pushes the quantity toward fewer, larger orders. | Lot Sizing Rule of Economic Order Quantity |
| EOQ Holding Cost % | The annual cost of holding one unit as a percentage of its value — storage, capital, insurance, shrinkage. A higher figure pushes the quantity toward smaller, more frequent orders. | Lot Sizing Rule of Economic Order Quantity |
| Period Order (days) | How many days of net requirements are bundled into one order, so you reorder less often. | Lot Sizing Rule of Period Order Quantity |
| Days of Supply | How many days of forward demand each order covers. | Lot Sizing Rule of Days of Supply |
Order Maximum splits, it does not cap. A requirement of 1,000 against a maximum of 250 becomes four planned orders that all carry the same due date, not one order of 250 with the rest pushed into later periods. Each slice is kept on the Order Multiple and at or above the Order Minimum, and the slices always add up to the quantity the rule asked for.
Planning methods
Planning Method decides how supply for the item is worked out at all.
| Method | What it means |
|---|---|
| MRP | Full material requirements planning — demand is exploded through the recipe and every component is netted, level by level. The default, and the right answer for most items |
| Reorder Point | Simple replenishment — an order is suggested whenever projected stock drops to the Reorder Point |
| MPS | Planned from a master production schedule you set, rather than from exploded demand. See Build a master production schedule |
| Min / Max | Stock is topped back up to a maximum whenever it falls below a minimum |
| None | Excluded from planning runs entirely |
None is not "plan it later". An item set to None is dropped from every run, and the dialog says so: "This product is excluded from MRP planning (Planning Method = None). The parameters below are not used." Its other settings are kept but never read.
Procurement types
Procurement Type decides what a planned order becomes when you carry it out.
| Type | What it means |
|---|---|
| Make | Build it in-house. Carrying it out creates a draft manufacturing order, and it requires an active recipe |
| Buy | Purchase it. Carrying it out creates a purchase order to the supplier |
| Transfer | Replenish it from another warehouse. Carrying it out creates a warehouse transfer |
| Make or Buy | Make when an active recipe exists, otherwise Buy |
Make or Buy compares nothing. It is a recipe-presence test: if the item has an active recipe the plan makes it, and if it does not the plan buys it. No cost is loaded and no lead time is weighed, so it will never tell you that buying would be cheaper or faster. Use it for items where the answer is genuinely "whichever we can", not as a sourcing decision.
An item set to Make with no active recipe cannot be planned as a build, and the run raises a No Active BOM message against it rather than inventing one — see Action and exception messages.
An item set to Transfer needs a lane saying which warehouse resupplies which, and how long the move takes. See Plan replenishment across warehouses.
Lot sizing rules
Once a run finds a shortage, the Lot Sizing Rule turns that number into an order quantity. Order Minimum, Order Multiple and Order Maximum are then applied on top of whatever the rule produced, whichever rule it was.
Lot for Lot
Orders exactly the shortfall, no more. Nothing extra to set. The default, and the one that keeps the least stock on the shelf.
Fixed Order Quantity
Always orders in a set batch, repeated until the shortfall is covered — a shortfall of 410 against a batch of 150 becomes 450. Reads Fixed Order Quantity, which has to be greater than zero.
Min / Max
Orders enough to bring projected stock back up to the Reorder Up To Level, rather than only back over the line. Reads Reorder Point as the level that triggers the order and Reorder Up To Level as the target. With Reorder Point left empty, Safety Stock is used as the trigger instead; with Reorder Up To Level left empty, the plan replenishes back to the trigger.
Economic Order Quantity
Balances what it costs to place an order against what it costs to hold the stock that order brings, and takes whichever is larger — the economic quantity or the actual shortfall. Reads EOQ Ordering Cost and EOQ Holding Cost %, both required.
It also reads two figures you do not type: the item's annual demand, worked out from its own consumption history, and its unit cost. Until an item has both, the rule has nothing to balance and falls back to ordering the shortfall — so a brand-new item planned on EOQ behaves like Lot for Lot for a while.
Period Order Quantity
Combines several periods of demand into one order, so you place fewer, larger orders. Reads Period Order (days).
Days of Supply
Orders enough to cover a set number of days of forward demand. Reads Days of Supply.
The two period-based rules look similar and behave the same way: both add up the net requirements across a forward window and order the total. The difference is only which field names the window.
Lead time sources
Lead Time Source decides where the run reads the lead time it offsets by. Each source falls back to the next when its own source has nothing to offer, so no source ever leaves the plan without a number.
| Source | Where it reads from | What happens when that is empty |
|---|---|---|
| Manual | The Lead Time (days) you typed on the policy | Nothing to fall back to — the value you typed is the value used |
| From BOM | The active recipe's manufacturing lead time | Falls back to the policy's Lead Time (days) when the item has no active recipe |
| From Supplier | The supplier's quoted lead time | Falls back to the policy's Lead Time (days) when no supplier quotes one |
| Computed | The item's own received purchase-order history — the average actual days between placing an order and receiving it | Falls back to the supplier's quoted lead time, then to the policy's Lead Time (days), when there is not enough history yet |
Lead Time (days) can only be typed while Lead Time Source is Manual — the field is read-only under the other three. It is still the last fallback for all of them, so to give a source something to fall back on, set Manual, type the number, then switch the source back. The value you typed is kept.
From Supplier is the default. For an item you build, From BOM is usually closer to the truth; for one you buy regularly, Computed tells you what your supplier actually does rather than what they promised.
Rules the plan enforces
Three combinations do not make sense, and the plan refuses them on the dialog, on bulk apply and on import alike. Each one names the fields the way the form does:
- "Fixed Order Quantity must be greater than zero when the Lot Sizing Rule is Fixed Order Quantity."
- "EOQ Ordering Cost and Holding Cost % are both required when the Lot Sizing Rule is Economic Order Quantity."
- "Reorder Point is required when the Planning Method is Min / Max or Reorder Point."
On the dialog, the EOQ rule shows as a notice above the two cost fields the moment you choose Economic Order Quantity, the blank fields carry their own error once you have touched them, and CREATE POLICY stays disabled with the same sentence on it until both are filled.
Safety Lead Time (days)
Safety Lead Time (days) is extra padding added on top of whatever the Lead Time Source resolves to, for every item and every procurement type. Set it to 3 and every order for that item is released three days earlier than the arithmetic alone would ask for. It is how you absorb a supplier who is reliably a little late without overstating the lead time itself.
Safety Lead Time (days) has no field in the Add or Edit Planning Policy dialog. The only way to set it is the spreadsheet round trip — export your policies, fill in the column, and import the file back. The engine reads it normally once it is there, and the export carries it, so a value you set this way survives the next export and re-import.
See Import MPS entries and planning policies for the round trip, and Exports, imports and permissions for what the file contains.
Setting many items at once
BULK APPLY POLICY on the Policies page writes the same values across a set of items, and it ticks attributes one at a time — only the attributes you tick are written, and anything left unticked keeps whatever each item already has. The attributes it offers are Planning Method, Procurement Type, Lot Sizing Rule, Lead Time Source, Lead Time (days), Safety Stock, Order Minimum, Order Multiple and Order Maximum.
Each item is updated in its own warehouse scope, so a warehouse override stays an override and an item default stays the default. The rule-specific fields — Fixed Order Quantity, the EOQ costs, Period Order (days), Days of Supply, the reorder levels — are not bulk-appliable, because they rarely share one value across a set of items. Set those per item, or through the import.
Related
- Set item planning policies — creating, editing and bulk-applying a policy
- How a planning run works — where each of these settings is read during a run
- Import MPS entries and planning policies — setting policies in bulk from a spreadsheet
- Exports, imports and permissions — the policy file's columns
- Action and exception messages — what the plan tells you when a policy cannot be honoured
- Create a recipe (BOM) — the active recipe Make, Make or Buy and From BOM all depend on