CSV example documentation

[Arnold Souza]

Hi, my name is Arnold and I find your project very useful, 

I was trying to implement the idea with my dataset but I have a lot of doubts about how to format my data to fit the CSV example presented in the supplychainpy documentation. For example, what is "backlog", how do I calculate my reorder cost, I saw that the example dataset begins in january. So, how much data is necessary (talking about mounths)? 12, 24 months? And what about the analysis that ends in the half of year? Should I get data from the last 12 months? Or should I just collect data since the beginning of the year?

[Kevin Fasusi]

Hi Arnold,

Great to hear from you. Thanks for checking out the project. The backlog (also called back-orders) is the demand that has gone unfulfilled due to a lack of stock on-hand. Customers may have placed orders at a time when their purchase order could not be satisfied from available inventory. Conceptually, you can view backlog as negative stock. If you have ten items in backlog and zero units available in stock, once the stock is replenished from a new delivery by say 20 units, you may fulfil the ten back-orders leaving you with only ten items in stock. I hope that adequately explains backlog. 

Reorder-cost can be a bit more complicated to derive. Reorder-cost is the cost of regularly placing a purchase order. It can include several cost items and is dependent on your operational activity. The reorder-cost can consist of the costs associated with processing a purchase order, which can include raising a pick request, picking, packing, distribution and the costs associated with handling goods received. In a simple operation, the reorder-cost will consist of the cost related to warehousing, administration and distribution. 

In practice, the reorder-cost is calculated by dividing the total number of purchase orders fulfiled in a year by the yearly cost of your operations function as a cost centre in the same year. In a large organisation, you can ask the finance department for the annual cost of your operations cost centre; the finance department will likely retrieve the yearly cost of your operations function as a cost centre from an ERP like SAP. The annual cost for the operations department will also include salaries, and for this reason, it may be a bit of a tricky request. I have typically found that as long as you request the total figure and not a breakdown, then you are likely to get the figure for your calculation.

You should use a minimum of 12 months of data. You do not have to start in January, work back 12 months from the month you are ending the dataset.

All the best with your work Arnold. If there is anything else you have an issue with feel free to post again, and I will respond asap. Have a good one.