Examples: Inventory Transfer Request - Warehouse Selection and Recommendation Algorithm 
Prerequisites
The MRP only recommends inventory transfer request when:
You have selected to run the MRP by warehouse in MRP Wizard, Step 4: Inventory Data Source.
You have selected the Inventory Transfer Request checkbox as a recommendation type in MRP Wizard, Step 5: Documents Data Source.
Warehouse Selection Rules
The MRP recommends inventory transfer requests per the following steps:
Inspect the demands from each warehouse and serves the warehouse with the largest demand first.
NoteThe MRP gives priority to inventory transfer request, which is to say, the MRP always recommends inventory transfer request before it recommends purchase orders and production orders.
End of the note.Select an issuing warehouse.
NoteThe application only considers warehouses for which you have selected the Include Initial Inventory checkbox in MRP Wizard, Step 4: Inventory Data Source .
End of the note.Filter all warehouses in the same location as the issuing warehouses.
Select the warehouse with the largest available inventory as the issuing warehouse.
If there are more than one warehouse that have the highest available quantity, sort the warehouses first by location, then by warehouse code.
After MRP selects an issuing warehouse, it calculates to see whether this issuing warehouse can fully satisfy the demands from the receiving warehouse.
If yes, the MRP moves to other warehouse with demands and repeat the calculation from the very beginning.
If no, the MRP moves back to step 2 and repeat the process to find another issuing warehouse.
If the MRP cannot find enough inventory to transfer to the receiving warehouse, it recommends purchase orders or production orders.
Example 1: Inventory Transfer Requests Recommendations
This example uses the following planning parameters:
Lead time: 2 days
Planning horizon: July 1 to July 4
Warehouses: W1 and W2
The table below shows the inventory status after implementing MRP inventory transfer requests and order recommendations:
Note
The receipts and receipts from recommendations are actually consolidated into one row in the MRP wizard as Supplies. To better present the calculation algorithm, the table displays the two types of receipts separately.
In the MRP wizard, if you want to view the origin of receipts, you can click the cells with supply values, and the Pegging Information window appears, displaying in the Remaks column whether the supply is a receipt from existing purchase or production documents, or a receipt from the orders recommended by the MRP.
July 1 |
July 2 |
July 3 |
July 4 |
July 5 Future |
July 6 Future |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
|
Order Recommendations |
6 |
2 |
3 |
|||||||||
Initial Inventory |
10 |
1 |
-4 |
0 |
-1 |
0 |
0 |
0 |
0 |
1 |
0 |
0 |
Demands |
15 |
5 |
15 |
3 |
3 |
|||||||
Receipts |
3 |
16 |
||||||||||
Inventory Transfer |
1 |
-1 |
3 |
-3 |
15 |
-15 |
1 |
-1 |
||||
Receipts from Recommendations |
6 |
2 |
3 |
|||||||||
Final Inventory |
-4 |
0 |
-1 |
0 |
0 |
0 |
0 |
1 |
0 |
0 |
0 |
0 |
July 1
Warehouse W1 needs 5 items to stay balanced. The MRP first considers inventory transfer from W2 to W1, because inventory transfers are not confined to lead time requirements. Now W2 only has 1 items to be transferred, therefore, the final inventory on July 1 is -4 for W1 and 0 for W2.
July 2
Warehouse W2 receives 3 items on July 2. The MRP recommends to transfer these 3 items to W1 so that the final inventory on July 2 is -1 for W1 and 0 for W2.
July 3
No extra items from W2 can be transferred, yet there is a demand for 6 items from W1. Since July 3 is out of the lead time period, the MRP recommends orders for 6 items on July 1, the first day of the planning horizon, so that W1 has a receipt from recommendation to keep inventory balance.
July 4
Warehouse W1 has a demand of 15. Since W2 has 16 items received this day, the MRP recommends to transfer 15 of them to W1, so that both warehouses are balanced with the final inventory of 0 and 1.
July 5
Warehouse W1 has a demand of 3, but W2 only have 1 item to offer. Therefore the MRP first transfers this 1 item to W1, then schedules an order recommendation on July 3, 2 days prior to July 5, to fulfill the demand for another 2 items.
July 6
Warehouse W1 has a demand of 3 items and W2 has no inventory left. The MRP can only recommend orders for W1 on July 4 to fulfill the demand on July 6.
Example 2: Inventory Transfer Requests Recommendations (Considering Inventory Level Requirements)
This example uses the following planning parameters:
Lead time: 2 days
Planning horizon: July 1 to July 4
Warehouses: W1 and W2
Inventory Level:
W1: 10
W2: 10
The table below demonstrates how the MRP plans for inventory transfer request and orders when considering inventory level as a demand.
Note
In the MRP result report, the application does not show the inventory level requirements in the Demands column. The MRP automatically calculates the inventory level requirements and reflects the demands in order recommendation quantities.
July 1 |
July 2 |
July 3 |
July 4 |
July 5 Future |
July 6 Future |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
W1 |
W2 |
|
Order Recommendations |
16 |
10 |
2 |
3 |
||||||||
Initial Inventory |
10 |
1 |
-4 |
0 |
-1 |
0 |
10 |
10 |
10 |
11 |
10 |
10 |
Demands |
15 |
5 |
15 |
3 |
3 |
|||||||
Receipts |
3 |
16 |
||||||||||
Inventory Transfer |
1 |
-1 |
3 |
-3 |
15 |
-15 |
1 |
-1 |
||||
Receipts from Recommendations |
16 |
10 |
2 |
3 |
||||||||
Final Inventory |
-4 |
0 |
-1 |
0 |
10 |
10 |
10 |
11 |
10 |
10 |
10 |
10 |
July 1
Warehouse W1 needs 5 items to stay balanced. The MRP first considers inventory transfer from W2 to W1, because inventory transfers are not confined to lead time requirements. Now W2 only has 1 items to be transferred, therefore, the final inventory on July 1 is -4 for W1 and 0 for W2.
NoteThough there are inventory level requirements for W2, the MRP gives order demands higher priority. Therefore, within the lead time period, the MRP first transfers available inventory from W2 to W1 to catch up with the demands for W1 that is due on July 1.
End of the note.July 2
Warehouse W2 receives 3 items on July 2. The MRP recommends to transfer these 3 items to W1 so that the final inventory on July 2 is -1 for W1 and 0 for W2.
July 3
No extra items from W2 can be transferred, yet there is a demand for 6 items to keep the inventory from falling negative numbers. Considering the inventory level requirements, the MRP recommends 16 items for W1 and 10 items for W2 on July 1, the first day of the planning horizon, so that the both warehouses have receipts from recommendations to fulfill order demands as well as inventory level requirements.
July 4
Warehouse W1 has a demand of 15. W2 has 16 items received this day. Therefore the MRP recommends to transfer 15 items from W2 to W1, so that the final inventory is 10 for W1 and 11 for W2.
July 5
Considering the inventory level requirements for both warehouses, W1 is in short of 3 items while W2 only has 1 item to offer. Therefore the MRP first transfers this 1 item to W1, then schedules an order recommendation on July 3, 2 days prior to July 5, to fulfill the demand of W1 for another 2 items.
July 6
Considering the inventory level requirements for both warehouses, W1 is in short of 3 items while W2 has no item to offer. The MRP can only recommend orders for W1 on July 4 to fulfill the demand on July 6.