How to Keep Track of an Item Usage

Keep track of inventory movement by calculating your average daily or monthly use from data available on each individual item.

Infoplus utilizes usage values for activity projecting how long the current on-hand supply will last. Using a Low Stock notification will allow the right person to know when inventory levels for a specified item are too low to meet current demands (These can be used to facilitate the acquisition of product from a supplier).  An important part of these projections is the Item Usage table, the Average Daily Usage calculation on the Item record>Stock Status tab, and the Demand calculation on the Item record found under the 'Inventory Level' column and on the Order Source Reservation tab.

Item Usage table

This table is an extension of the information about item usage found in the “Usage” tab on Item records. It exposes data about the usage of SKUs by year and month, per Warehouse and LOB. Totals are kept for both “Normal Usage” and “Abnormal Usage.” “Abnormal Usage” values only increment if the “Alternate Usage” value on an order is set to “Y.”

What is Average Daily Usage?

The Average Daily Usage represents the amount of an item that is used on an average day. As Orders are fulfilled usage is noted based on the Order’s date (as opposed to the date the Order was fulfilled).

This is of primary importance when projecting how long a remaining inventory is likely to last and in placing an order for a vendor to resupply the warehouse. It is a critical consideration in the generation of Low-Stock notifications that are based on an item's lead time.

Once the Average Daily Usage is calculated for an Item, the number of days can be projected how long the current On-Hand amount will last.   An Item can be set up to create Low stock notices by filling in a value in the Lead Time on the Item definition.

Calculation of Average Daily Usage

Average daily usage is calculated by looking back at the activity for the last 12 months and dividing that value by 365.  For any periods (months) that do not have any usage data, if provided estimated usage will be utilized (Estimated Annual Usage if provided can be viewed in the “Purchasing” tab when viewing an Item).   

Infoplus re-calculates an Item’s Average Daily Usage and Overall Days On Hand each evening during off-peak hours.

Abnormal Usage

Orders have an attribute “Alternate Usage” (in the Details tab) that defaults to No.  If an Order has an "Alternate Usage" value of Yes, that usage will not be considered in the calculation of Average Daily Usage.