You have the opportunity to make your shortage requirement calculations based on 2 different principles: Gross or net.
Gross calculation is equal to: “ I do not care what I have in stock of the end-item and components. Tell me what I need to deliver a product”
Net calculation is equal to: “Take into consideration whatever I have in stock currently of the end-item and needed components”
If “BOM Calculation Gross / Net” is set to Gross, the BOM calculation of the requirements and calculated future stock requirements on component lines are based on the full required amount quantity, and does not take into account available physical quantity in stock for the end-item and components.
Gross calculation example:
You ask for 10 pieces of the end item no. FX-42
Inventory is 10 pieces on item no FX-42. Anyway the physical stock, the calculations are based on you want this quantity in addition to the physical stock.
The calculations are based on your need for 10 pieces and does not take any physical stock into account neither at the end-item level nor at the component level.
If “BOM Calculation Gross / Net” is set to Net, existing available stock are deducted at the end-item level and component lines.
More precisely the net calculations starts working when you have used up the available physical inventory on the end item and components lines.
Net calculation example:
You ask for 10 pieces of the end item no. FX-42
Inventory is 10 pieces on item no FX-42. This stock figure is subtracted your wanted quantity before any component lines calculations are made.
Please be aware of the following using net calculations:
You have asked for 12 pieces of the end item.
The calculation finds out that you have 10 pieces in stock.
So the net requirement is 2 on the end item.
On the component MV2529 you have 12 pieces in stock. Therefore exceeding the requirement of 2 pieces.
So the rationale is to use existing stock before issuing any make orders recommandations for making orders.
Therefore you see red negative figure lines (make orders related this item). But also you see black negative figures which are related to requirements from other purposes requirements.
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