Net requirement
When determining requirements, a company faces the challenge of ensuring optimal use of the warehouse. Essentially, it’s about having sufficient stocks available for sale and planning replenishment in good time to ensure that everything runs smoothly. The so-called net requirement is an indicator in this context that is calculated as follows:
- Gross requirement
- less open orders
- less Stock
- plus reservations
- plus safety stock
- Net requirement
In plain language: net requirement would correspond to the gross requirement if there were no open orders, stock, reservations or safety stock. It represents a coverage gap that provides information on how high the demand to be planned is with regard to warehouse or workshop stocks.
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