--- title: "Understanding the Min/Max Stock Calculation" canonical: "https://kb.myframeworks.com.au/space/FRAM/28412296/Understanding%20the%20Min%2FMax%20Stock%20Calculation" format: markdown --- # Overview The Min/Max stock calculation in Frameworks is a systematic approach to inventory management, ensuring optimal stock levels are maintained to meet demand without overstocking. This process involves setting minimum (Min) and maximum (Max) stock levels for each product, which are dynamically adjusted based on various factors. By integrating the elements below, Frameworks' Min/Max stock calculation ensures efficient inventory management, balancing product availability with cost-effective stock levels. ## 1. Ranking of Products by Sales History The products are ranked based on their sales performance over the past 12 months. > ✅ The sales performance for the past 3 years for each product can be viewed within the [Product Dashboard](https://sterlandsupport.atlassian.net/wiki/spaces/FRAM/pages/28379182) in [Sales History](https://sterlandsupport.atlassian.net/wiki/spaces/FRAM/pages/28379222). --- ## 2. Setting Performance Category Based on Ranking In [Min/Max Forecasting Maintenance](https://sterlandsupport.atlassian.net/wiki/spaces/FRAM/pages/28409312), the ranked products are assigned to defined percentile groups and given a performance category. This is done in one of two ways, based on the set **Forecasting Method**: ### Std Min/Max Days The ranked products are sorted into defined percentiles. If for example, there are 1000 products and the highest percentile is 15%, the next 60% and the last 25%, the ranked groups would be as follows: | **Rank** | **Rank %** | **Performance Category** | **Product Ranks** | | --- | --- | --- | --- | | 1 | 15 | A - Fast Moving | 1 - 150 | | 2 | 60 | B - Medium Moving | 151 - 750 | | 3 | 25 | C - Slow Moving | 751 - 1000 | ### By Product Group Similar to **Std Min/Max Days**, however, the percentiles are applied per product group. If for example, the highest percentile is 15%, the top 15% of ranked products is taken from each product group and placed in the highest performance category. If there are 2 product groups, Product Group A has 200 products and Product Group B has 100 products, the ranked groups would be as follows: | **Rank** | **Rank %** | **Performance Category** | **Product Ranks (Product Grp A)** | **Product Ranks (Product Grp B)** | | --- | --- | --- | --- | --- | | 1 | 15 | A - Fast Moving | 1 - 30 | 1 - 15 | | 2 | 60 | B - Medium Moving | 31 - 150 | 16 - 75 | | 3 | 25 | C - Slow Moving | 151 - 200 | 76 - 100 | --- ## 3. Calculating Average Daily Sales The system calculates the average daily sales based on the product sales over an assigned period (as defined in Company Maintenance - Months Sales in Re-ord) For example:  - The assigned period is 3 months. - The day of calculation is 18/06 (18 June). - The branch has sold 156 units of a product over the April - June period. So, the average daily sales would be:  156 / 78 (2 months (all months are calculated as having 30 days) = 60 days + 18 days of June) = an average daily sales quantity of 2. Note: this result is not rounded (e.g. if the result is 5.86 then the average daily sales would be 5.86) --- ## 4. Calculating New Min/Max Based on Performance Category The new minimum and maximum stock levels are calculated based on the **Min Days** and **Max Days** respectively assigned to each performance category in [Min/Max Forecasting Maintenance](https://sterlandsupport.atlassian.net/wiki/spaces/FRAM/pages/28409312). Therefore in the example set out above, if Performance Category A has a **Min Days** value of 20 and a **Max Days** value of 30, the min/max of the product in this category would be: - The minimum quantity would be 40 (average daily sales of 2 x the defined min days of 20). - The maximum quantity would be 60 (average daily sales of 2 x the defined max days of 30). The calculations then go through the following steps: - Leave the minimum as first calculated then calculate the maximum without pack rounding. - Calculate the difference between the minimum & maximum - Round the difference up to the next inner pack qty - Set the new maximum to the calculated minimum + rounded difference --- ## Weighting Min/Max Based on Seasonal Weighting In [Seasonal Weighting Maintenance](https://sterlandsupport.atlassian.net/wiki/spaces/FRAM/pages/28391522), product groups can be assigned seasonal weightings to be applied over certain periods during the year. This can be put in place to compensate for periods of increased sales. If for example, the sales of a product group increase over the holiday period, a seasonal weighting of 40% may be applied. Therefore, a product in this group with min/max levels of 40/60 would become 56/84. --- # Additional Information > ✅ - Refer to [Min/Max Forecasting Maintenance](https://sterlandsupport.atlassian.net/wiki/spaces/FRAM/pages/28409312) for more information about assigning performance categories. > ✅ - Refer to [Seasonal Weighting Maintenance](https://sterlandsupport.atlassian.net/wiki/spaces/FRAM/pages/28391522) for more information about assigning seasonal weightings.