ABM Inventory can make orders according to both scenarios: either direct deliveries, or the distribution centre (DC) deliveries (distribution centre = central warehouse). If the supply chain looks the following way: External supplier - Distribution Centre - Stores, it is the DC that will act as a supplier for the Stores (therefore it is important to save the synchronization between the Stores and the DC).

For the DC inventory, it is the External Supplier who acts as a main supplier. So, the orders from the stores are being formed at the DC (using DBM, CDA or FRESH algorithms, which consider the current demand for SKUs).

For the inventory at the DC order mechanism differs - here we use DFO. DFO algorithm means that the orders to the external supplier from the DC will be formed according to the current demand level across the stores and considering the current levels of stock across the stores.

The calculation has several stages:

  1. Current demand for SKUs in each store (in other words, the system analyzes the quantity of goods needed to satisfy the current demand level considering the current inventory level).
  2. Future demand for SKUs in each store until the next delivery (the system analyzes the quantity of goods needed to satisfy the demand until the next delivery from the External
  3. Supplier, considering future promotions).
  4. Stages 1 and 2 are being summed up (first, we calculate the demand for SKUs for each store, and then, we sum up data for all stores).
  5. The DC demand is being taken into account (if the DC sells goods, we need to calculate the quantity of goods needed to guarantee sales on the DC).
  6. Current data on the DC (leftovers, reserves on DC) are being considered.