To answer that question, we need to first understand what these concepts mean. This article aims to help define non-stocked and zero policy items, and thereafter outline the basis of the model stock calculation.
Non-stocked item
This is an item which will not be replenished based on a forecast or on minimum/maximum required stock levels, but rather, it will be replenished only if there is a firm demand expected within the lead time (i.e a customer order, BOM requirements and/or DC requirements). In other words, it is an item not held in inventory but still available for ordering should demand require it.
Zero Policy item
This is a variation of a non-stocked item. It is most useful for make-to-order finished goods. Like a non-stocked item, a zero policy item won't be held in inventory. The difference is that a zero policy item will allow the finished good (or even sub-assembly) sales forecast to flow down to raw materials and components to influence the purchasing recommendations without holding additional stock. Typically, zero policy is applied to Bill of Material items but it can also be applied to Distribution Center items.
It can be supplied in the files provided to Netstock or applied through policy overrides (Settings → Policy overrides → New Rule).
You will be able to identify an item that has zero-policy applied by the classification field on the Details panel on the Inquiry screen:
Which brings us to…
How is model stock calculated for non-stocked and zero-policy items, considering there are no replenishment cycle (RC) and safety stock (SS) values which are usually the basis of the calculation (i.e. Model stock = SS+ ½ RC)? The model stock level is simply set to half of the current stock on hand. This is a compromise between the true target of zero stock tempered by the practical difficulties of achieving it. Over time, as stock moves closer to zero, the model will also shift closer to zero.. See example below.
In the Details panel above, the stock on hand for this particular item is 34 units. The model stock level will then be half of that, which is 17 units. Therefore, the model stock level for the non-stock item is 17 units.
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