What is a Planned Order Receipt?
A planned order receipt is a comprehensive broken-down inventory list along with its quantity and pricing. It is a projected receipt created from a submitted planned order. Some commonly used terms for planned order receipts are released MPS, planned receipts, or released orders.
A scheduled receipt might vary slightly from a planned order receipt, as it highlights confirmed orders, sometimes resulting from revisions in a planned order receipt.
Significance of Planned Order Receipt in an E-commerce Shipping and Delivery
A planned order receipt is a comprehensive breakdown that allows sellers to optimize and track pricing from different vendors and determine the need for listed products. It helps companies in the following aspects of inventory management:
- Pricing: The pricing from a manufacturer’s end constantly changes per the market demand. Going through a released MPS enables sellers to identify price fluctuations, allowing them to respond accordingly.
- Error handling: Planned receipts are made from a planned order. Sellers must acknowledge a planned order receipt before it is used. A complete list of product quantities allows a seller to identify any forecasting mistake and deal with it appropriately.
Prerequisites of Planned Order Receipt and How It Works
A planned order receipt is used when there is a need for inventory restocking at a given point. Once a shortfall is identified and the need for a planned order receipt is acknowledged, the mentioned steps follow.
- Planned order: The requirement is forecasted, and a planned order receipt is created based on factors like order rate, periodic order rate growth, product shelf-life, and more.
- Approval: The seller must approve the receipt or make the necessary revisions.
- Follow-up: The planned receipts are then forwarded to the concerned manufacturers and as scheduled receipts.
Use Case with Planned Order Receipt
A seller in Manila city has an average order rate of 1,200 units per month. The order growth rate has been determined to be at 10%, while the shelf life of the products is one month. Based on the mentioned metrics, the seller creates a planned order receipt requesting to purchase 1,320 products from their manufacturer.