How to setup SOQ Formula 4 & Reorder Point Auto Calculator

Formula 4 pairs the Reorder Point Auto Calculator (V3) with a trigger-based Suggested Order Quantity (SOQ) calculation. Instead of manually keying in Reorder Point, Safety Point, and Maximum Point for every item, the system derives these thresholds automatically from each item's sales history — and only suggests an order quantity once stock actually needs replenishing.

Formula 4 is selected the same way as Formulas 1–3, via System Configuration > Item > Reorder Point > SOQ formula. See how-to-set-reorder-point for the general Reorder Point workflow — this guide covers what's different about Formula 4.

Part 1: Understanding the Reorder Point Chart

Before configuring Formula 4, it helps to understand the four reference points the system tracks over time for each item:

As stock sells down from the Maximum Point, it eventually crosses the Reorder Point. Because delivery takes time (Lead Time), the order must be placed before stock reaches Safety Point — the Reorder Point line gives enough buffer to cover sales during the Lead Time.

Part 2: Reorder Point Calculator V3 Configuration

Formula 4's thresholds are auto-calculated from four configuration values, set per item (or per outlet):

Average Sales per Day = Total sales over the "Average Sales by Day" period ÷ number of days in that period
                         (rounded to 4 decimal places)

Reorder Point = (Lead Time by Day + Minimum Stock Level by Day) × Average Sales per Day
                (rounded up to the nearest integer)

Safety Point  = Minimum Stock Level by Day × Average Sales per Day
                (rounded up to the nearest integer)

Maximum Point = Maximum Stock Level by Day × Average Sales per Day
                (rounded up to the nearest integer)

Worked example — Reorder Point Calculator V3

Configuration: Average Sales by Day = 6 days, Minimum Stock Level by Day = 5, Maximum Stock Level by Day = 15, Lead Time = 7 days.

Sales quantity for the 6 days prior to 26/08/2021:

Reorder Point = (7 + 5) × 10.3333 = 124
Safety Point  = 5 × 10.3333 = 52
Maximum Point = 15 × 10.3333 = 155

These three values (Reorder Point, Safety Point, Maximum Point) are recalculated automatically on each run and feed directly into the SOQ Formula 4 calculation below.

Part 3: SOQ Formula 4 Calculation

Formula 4 only suggests an order when a Trigger Point condition is met.

Trigger Point

Reorder Point > (Onhand Quantity + In Order Quantity + Transfer In Quantity)

• Onhand Quantity — physical stock currently at the outlet.
• In Order Quantity — stock already on outstanding purchase orders, not yet received.
• Transfer In Quantity — stock incoming via transfer from another outlet, not yet received.

SOQ result

Unlike Formulas 1–3, Formula 4 does not subtract on-hand or in-order quantities from the SOQ result itself — once triggered, it always suggests replenishing the full gap between Maximum Point and Safety Point.

Worked example — SOQ Formula 4

Using the Reorder Point Calculator V3 results from Part 2 (Reorder Point = 124, Safety Point = 52, Maximum Point = 155), and the following stock position on 26/08/2021:

Suggested Order Quantity (SOQ) = Maximum Point − Safety Point
                                = 155 − 52
                                = 103

Part 4: Sales Quantity Consolidation (Multi-Outlet Sales)

For outlets that don't sell directly (e.g. an HQ or warehouse that supplies branches), Formula 4 can consolidate the sales quantity of several branch outlets into one figure, so the Reorder Point Calculator forecasts based on group-wide demand rather than the HQ outlet's own (possibly zero) sales.

Each outlet is tagged with a Consolidation Group (set in that outlet's Company Info). An outlet's Reorder Point calculation can then be configured to pull in the total sales quantity of all outlets sharing a given Consolidation Group.

Worked example — Sales Quantity Consolidation

HQ One Branch's Sales Quantity = Main Branch + Relau Branch + Paya Terubong Branch + Georgetown Branch
                                = 10 + 20 + 12 + 15
                                = 57

Sungai Ara Branch is excluded because it belongs to a different Consolidation Group (HQ Two).

A second, general example: if outlet A and outlet B both belong to Consolidation Group Test, and outlet C belongs to Consolidation Group Test Two, then an outlet configured to consolidate group Test will sum only A + B, excluding C.

Part 5: Where to Configure

Formula 4 has three separate configuration points. All three must be set up for consolidation to work correctly; the first two steps alone are enough if you are not using multi-outlet consolidation.

Step 1 — Define the Consolidation Groups (Maintenance Setting)

1. Go to Setting > System Configuration.
2. Set Category to CompanyInfo and Type to Reorder Point Consolidation.
3. Click Add, enter a group name (e.g. A, HQ One), and save.

This creates the list of Consolidation Group values available for outlets to be tagged with. You can view All Outlets or Current Outlet scope at the top of the screen.

Step 2 — Select Formula 4 and configure V3 settings (Item Settings)

Press "Configure" to proceed

1. Go to Setting > System Configuration > Item > All Outlets.
2. Scroll to the Reorder Point section and set SOQ formula to Formula4.
3. Click Configure next to Auto calculate reorder point V3 configuration.
4. In the dialog, set:
   • Average Sales (value + unit, e.g. 6 Months)
   • Minimum Stock Level by Days
   • Maximum Stock Level by Days
   • Lead Time by Days (or enable Configure lead-time-by-outlet for per-outlet lead times)
5. Under Sales Quantity Consolidation, click the green + button to add a row, then select the Outlet and the Consolidation Group whose sales it should pull in. Repeat for each outlet that needs consolidation.
6. Click Save, then Close.

Step 3 — Tag each outlet with its Consolidation Group (Company Info)

1. Go to Setting > Company Info.
2. Select the Outlet from the dropdown at the top.
3. Click the Additional Information tab.
4. Scroll to Reorder Point Outlet Consolidation Group and select the group this outlet belongs to.
5. Click Save.

Repeat Step 3 for every outlet that participates in Consolidation (both the branches being summed, and the HQ outlet doing the summing).

Quick Summary

After configuration, the system automatically recalculates Reorder Point, Safety Point, and Maximum Point from sales history, and applies the Trigger Point check to decide whether to suggest an order — no manual threshold entry required per item.

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