What is Surplus and How do I Review Surplus and Create Transfers

What is Surplus and how is it calculated

Surplus is material in a branch that is above and beyond the quantity needed to reasonably fill customer needs for the branch for a short period of time.

Surplus is calculated as On Hand – Committed – Buy Point – (EOQ * Percent specified)

Surplus can be seen in the Branch Info, SPO Details, and Review Surplus and Create Transfers screens. 

To set the EOQ percentage, go to System Administration > Module Controls > Purchasing Parameters. In the Suggested Purchase Order section, specify the percent you want, from 0 to 100. The default is 100.

An example of how surplus works:

Steven is a purchasing manager for branches A and B and placing orders for branch B. One of the items he needs to purchase is nails.

When Steven runs his SPOs, Agility has a recommended buy of 50 for the item. Steven sees the item has surplus in branch A so he opens the Review Surplus and Create Transfers screen to review how much he can take from the other branch.

Setting the % of EOQ at 0:

EOQ for the item is 50 in Branch A. If branch A has 125 boxes of nails, the system may determine that 50 are surplus based on the surplus calculation of On Hand – Committed – Buy Point – % of EOQ (125 - 25 – 50 – 0).   Steven can buy all 50, leaving branch A with 50 boxes.  However, the item in branch A is now at its buy point (50 boxes) and will be recommended to buy the item in SPOs.  

Setting the % of EOQ at 100:

In this case, the surplus calculation is (125 – 25 – 50 – 50) = 0. Branch A would not have any surplus to ship from.

Setting the % of EOQ at 50:

In this case, the surplus calculation is (125 – 25 – 50 – 25) = 25. Steven could transfer 25 boxes to branch B to cover part of his need.

How to Review Surplus and Create Transfers

The Review Surplus and Create Transfers screen displays suggested purchase order items as well as branch surplus quantities. From this window, users can specify branch transfer quantities and create transfer purchase orders and their associated shipping sales orders to fulfill the suggested purchase order.

1.        Run SPOs with the Calculate Surplus option checked.

2.      Review SPO details.

3.      On the items that show a Surplus = Yes value, click on Actions and then Review Surplus and Create Transfers. You have 3 options: All items, Selected items, or Items with recommended buy.

4.     Once in the Review Surplus and Create Transfers screen, review the recommended buy field and the surplus quantity. Type the transfer quantity in the field, then click Append to Transfer or Create New Transfer.

5.      Fill out the Info for PO values, then click Ok. The transfer PO is created and you are returned to the SPO details screen.

For more information, watch our video about ordering from surplus with SPOs.