Planning D365 F&O

Master Planning in D365 F&O
At its core, Master planning allows companies to determine and balance the future need for
raw materials and capacity to meet company goals. Master planning assesses the following:
 What raw materials and capacities are currently available?

 What raw materials and capacities are required to complete production? For
example, what must be manufactured, purchased, transferred, or set aside as
safety stock before you can complete production.
Master planning uses the information to calculate the requirements and generate planned
orders. The three main planning processes are:
 Master planning - The master plan calculates net requirements. It's based on
actual current orders and enables companies to control inventory replenishment
on a short-term, day-to-day basis. Another term to describe it's the Net
requirements plan.
 Forecast planning - The forecast schedule calculates gross requirements. It's
based on future projections (or forecasts) and enables companies to conduct long-
term planning of materials and capacity.
 Intercompany master planning - The intercompany master plan calculates net
requirements across legal entities. It connects demand and supply between
companies not only for short term, but also for long-term, planned (not yet
firmed) demand and supply.
Will be discussing Master and Forecast plan.
Companies can change the output of the plan. They can run regenerative, net change, or both.
Regenerative plans update all requirements, whereas net change plans only update the plan on
items with new requirements that have come in since the last scheduling run.
Master scheduling plans typically involve the short term, which can be anywhere from one
week to six months. The Master planning module determines the supply (materials) and
capacity (resources) needs that will meet current demand (the net requirements). In most
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companies, this is extended to include the longest cumulative lead time among the products to
be received.
To Explain it better I will use one Business cases.
Business Case:1
The buying head is responsible to perform the supply forecast based on last year's historical
sales.
D365 is offering two out-of-the-box solutions for planning your items, a Master plan (net
requirements) and a Forecast plan (Gross requirements). (Use only one plan)
Supply Forecast Plan Flow In D365
Step by Step Process
1.Create an Item in the Released Product Form.

Create an item in the released product form. Make sure to enter all the related information for
an item or you can take already created item.
For Example an item which is Purchased in a warehouse and sold by multiple warehouses either
through Retail channel or wholesale.
2.Define the default order setting.

In the default order setting form, enter the default purchase, inventory, and sales warehouse.
These will be the default warehouses for the item at the time of purchase, inventory, and sales.

3.Item Allocation Key

You can use an item allocation key to assign a percentage of an aggregate forecast to individual
items or item dimensions. An aggregate forecast is made at the group level. This could be a
forecast for an item group or an inventory dimension group.
Path: Inventory management > Setup > Forecast > Item allocation keys.

4.Define the Supply forecast for the item

Business users especially buying heads are responsible for item forecasting. They can define the
supply forecast for an item, item group, vendor, or vendor group.
Example- Yearly requirement is 1200 Box so monthly is 100 Box
5.Supply Forecast Form

To define the forecast, select the forecast model to use and then specify the item plus the
quantity or the transaction amount. We can also set up a time schedule for allocating the
forecast quantity.
Select the Method "Period" and define the unit "Days". Enter the end date and press ok.
6.Methods Allocating Forecast

Following options available to allocate the forecast transactions
 None - No allocation takes place.

 Period - Use this method to forecast the same quantity per period. When you
select this option, you use it along with the Per field where you specify a quantity,
and the Unit field, where you select the unit of time.
 Key - The forecast is allocated according to the period allocation key that you
specify in the Period key field. You can use this method when you want to take
seasonal variation into account.
Unit
Unit of time interval
 Days - Allocation corresponds to the number of days that you specify in

the Per field.
 Months - Allocation corresponds to the number of months that you specify in

the Per field.
 Years - Allocation corresponds to the number of years that you specify in

the Per field.
 Method: Period
 Per: 01/30
 Unit: Months/Days
 End: 04/01/2025

2 samples
Click the Inventory forecast button, the system will open the inventory forecast form. In this
form, the business user can see the Forecast Type: Supply Forecast along with the quantity and
the warehouse.
In the below screenshot, the system has created the inventory forecast for the month of March,
April and so on till the expiry date with the difference of 1 Month as specified in the Per field.

7.Forecast Plan Setup

In the forecast plan setup form, make sure to enable the check for "Include supply forecast".
Also, select the forecast model and time fence in days.

8.Run Forecast plan specifically for an item this time.

9. Validate the planned orders

The next step is to validate the "Planned orders" available in the master planning module. The
system has created three planned purchase orders.
The buying head can consolidate these three planned purchase orders and create one purchase
order with different delivery dates. It's also possible to create three different purchase orders
for all the planned orders. In both cases, the delivery dates will be the same as proposed by the
system.
Note: The master planning proposed these delivery dates as defined in the item forecast form.
Either we can Firm the orders one by one altogether.
Also, if we want to combine all the orders we can do that by using group functionality.
Select the orders and click on group.

But not grouping this time and moving with single orders
In the PO "line details> Product tab" the system has maintained the reference for the Master
plan "Forecast" along with the planned order reference number.

The buying head can view the Gross requirements, from the purchase order

Conclusion & Recommendations
 Forecas ng is making an informed predic on about placing an order.
 Using forecas ng models such as determining to reorder points and economic

order quan es can help ensure op mal inventory control.
 The buying head usually performs the supply forecast for the items and vendors
based on historical sales transac ons.
 The buying head can consolidate the sales transac ons by item group and create
the supply forecast at the item group level.
 It's good prac ce to create your item group as one of the financial dimensions. This
will help to analyze your supply chain transac ons in the Trial balance (view by
Financial Dimension) as well. However, never use your item master as one of your
financial dimensions. The item level report you can always view from submodules
(Sales, Purchase, warehouse, and Inventory).
 If you think defining the supply forecast at the item level is a cumbersome process,
you can select the item group or vendor group and then define the supply forecast.

Supply Master Plan Flow In D365
Master planning uses information from many different areas of the system to determine how
much of each item you must purchase and by what date you must purchase the inventory
(based on lead times in Dynamics 365 for Supply Chain Management) to fulfill the item
requirements on time.
By using master planning, you can:
 Demand from exis ng sales orders - Sales orders are one of the primary sources of
informa on for deriving purchasing requirements. Depending on your type of
business, this might drive direct purchases for distributed goods or direct purchases
for raw materials that are required to assemble or produce another item.
 Demand from exis ng sales quota ons - You can op onally select to include sales
quota on informa on in the es mates that are formed for the planned purchase
orders in the master planning output. This can be especially useful in make-to-order
scenarios or scenarios where products have a longer lead me.
 Es mate the forecast - You can use demand or supply forecasts in Supply Chain
Management to es mate how much of a product you will require during a specific
me period. Master planning can then use this informa on to derive planned
purchases for direct distribu on or produc on scenarios.
 Demand to meet safety stock levels - You can op onally configure safety stock for
key items in your warehouse to ensure that you always have a certain amount on
hand. When your inventory levels fall or are expected to fall below the safety stock
level that you have defined, Master planning will generate purchases for these
items to bring the on-hand level in your warehouse back up.
 Demand to meet minimum stock levels - You can op onally define minimum and
maximum levels for items in your warehouses, which will drive the requirements to
keep a certain amount of an item in your warehouse.
 Master planning calculates requirements and results in the genera on of planned

orders. The three main master planning processes are:
 Master plan - The Master plan calculates net requirements. It is based on actual
current orders and enables companies to control inventory replenishment on a
short-term, daily basis. Another term to describe it is the "Net requirements plan."

 Forecast plan - The Forecast plan calculates gross requirements. It is based on
future projec ons (or forecasts) and enables companies to conduct long-term
master planning of materials and capacity.
1. Sta c plans and dynamic plans
You can also run static or dynamic plans or both. The static plan is fixed and does not change
until regenerated, whereas the dynamic plan is regularly updated. These plans can be run in
various combinations to best suit the company's business needs.
 Sta c plan - The master planning calcula on uses the current data to generate a net
requirements plan. This is the plan where planned orders are normally approved
and firmed to generate supply orders. This plan remains unchanged un l the next
me you run master planning.
 Dynamic plan - This plan starts with the same net requirements plan that was
generated by master planning. However, you can update the dynamic plan every
me the transac onal data changes, for example, when you create a new sales
order. This enables you to monitor the changing order network and item availability
without disturbing the sta c plan that others are using for their work processes.
A company might choose to work with just a dynamic plan, or it can use both static and
dynamic plans. In addition, you can configure any master plan to reflect a strategy or address
an issue.
Example
 For short-term planning, whether daily, weekly, or even monthly, consider using a
dynamic plan to stay up to date with changes in daily opera ons, such as mix/max
requirements to ensure that the created safety stock journals will cover the
requirements for available items on hand.
 For long-term plans, usually yearly, you need to set longer safety margins to protect
against unforeseen circumstances, such as dealing with vendors who didn’t deliver
the goods as promised.
Step by Step Process
Eg- If yearly requirement is 1200 Boxes then monthly is 100
Minimum coverage should be = Monthly requirement

Maximum coverage Qty will be decision of Organization in most cases we multiply 1.5 to
minimum coverage Qty.
1. Using same item and setting item coverage
2.Setting the minimum and maximum inventory as per inventory unit
Order type tells what type of planned order will be created
Fulfill minimum will help you to calculate the receipt date for a purchase order

Lead me is used to tell what extra me will be required to get the material.
Eg- order date is today
For purchase – Order date + Lead me

For Produc on – order date + Run me + Lead me
3.Setup a master plan

Include on-hand inventory.

Select this op on if the master scheduling calcula on should include on-hand inventory levels
of the item. If on-hand inventory items levels should not be included, planned orders might be
generated for items that are already in stock.
Include inventory transac ons.
Select this op on if the master scheduling calcula on should include all expected transac ons.
These include sales orders and purchase orders, inventory journals, produc on orders that are
not yet registered as physical receipts, and issues from inventory.
Probability %
If you selected the Include sales quota ons op on, you can select a probability percentage. The
master scheduling calcula on includes all project or sales orders of the Quota on type that
have the same probability percentage or higher.
Include requests for quota ons.
Select this op on to include requests for quota ons. Transac ons that have a receipt status of
Quota on receipt are included in the master scheduling calcula on.
Include requisi ons.
Select this op on to include demand from requisi ons that have the Replenishment purpose in
the master scheduling calcula on. Requisi ons that have the Replenishment purpose and an
approved status are included.
Scheduling method
Select the scheduling method for planned produc on orders that are generated during master
scheduling. Opera ons scheduling provides a rough schedule that does not require you to
decide which specific resource performs each opera on. This method is also less demanding on
system resources. If you select job scheduling, a planned produc on order is scheduled in
detail, and a job is scheduled automa cally for the planned produc on order when it is firmed.
Finite property
Select this op on to indicate that capacity planning for the planned produc on order should
consider that the requested property ID is available. You create and update proper es in the
Proper es page.

Backward scheduling capacity me fence
Enter a period in days, star ng from the requirement date for an order and going backward,
during which master scheduling searches to iden fy available capacity. If no capacity is
available, the scheduling proceeds forward from the requirement date for the order.
Finite capacity
Select this op on to indicate that the scheduling of planned produc on orders will consider
capacity that has already been reserved. Note that planned produc on orders are backward
scheduled from the requirement date. If capacity is not available, the requirement for
component items is sought on an earlier date than what the op mal produc on sequence can
carry out. If the capacity can be changed as the requirement changes, such as when working
with shi s, you should not select this op on because calculated processing mes will be
incorrect. Scheduling considers capacity that is already reserved only if you selected the Finite
capacity op on in the Resources page. Selec ng this op on makes the Finite capacity me
fence field available to modify.
Finite capacity me fence
Enter a me period in days, star ng from the current date, during which planned produc on
orders are scheduled by using finite capacity. You cannot leave this field blank. This field works
with the capacity me fence that you can set up on the Time fences FastTab or in the Coverage
groups page. This field is available only when you select the Finite capacity op on. To include a
resource in finite capacity scheduling, you must select the Finite capacity field in the individual
resource or resource group. Example 1: You enter 15 in this field and set the capacity me fence
to 100 Master scheduling uses finite capacity for the first 15 days and infinite capacity for the
remaining days of the me fence. Example 2: You enter 25 in this field, and the item belongs to
a coverage group that states a capacity me fence of 10 Master scheduling uses finite capacity
for 10 days. Example 3: You enter 0 (zero) in this field Master scheduling does not use finite
capacity.
Finite capacity for bo leneck resources
Select this op on to calculate master scheduling by using finite capacity for those resources that
are defined as bo leneck resources. You can use bo leneck scheduling to extend the finite
capacity me fence for a limited number of resources. Bo leneck resources can be scheduled
by using finite capacity for a longer period than non-bo leneck resources. This field is available
only when you select the Finite capacity op on.
Capacity me fence for bo leneck resources
Enter a me period in days, star ng from the current date, during which those resources that
are defined as bo leneck resources are scheduled by using finite capacity. The bo leneck
capacity me fence should be greater than the finite capacity me fence. The greater value is

used. This field is available only when you select the Finite capacity op on and the Bo leneck
scheduling op on.
Include supply forecast.
A er you select a forecast model, select this op on to include the supply forecast in the current
master plan. If you do not select this op on, supply forecast transac ons are not included in the
master plan.
Include demand forecast.
A er you select a forecast model, select this op on to include the demand forecast in the
current master plan. If you do not select this op on, demand forecast transac ons are not
included in the master plan.
Method used to reduce forecast requirements.
Select a method to use to reduce forecast requirements during master scheduling. If you choose
None: Forecast requirements are not reduced during master scheduling. If you choose Percent -
reduc on key: Forecast requirements are reduced according to the percentages and me
periods that are defined by the reduc on key. If you choose Transac ons - reduc on key:
Forecast requirements are reduced by the transac ons that occur during the me periods that
are defined by the reduc on key. If you choose Transac ons - dynamic period: Forecast
requirements are reduced by the actual order transac ons that occur during the dynamic
period the dynamic period covers the current forecast dates and ends with the start of the
next forecast. The Transac ons - dynamic period method does not use or require a reduc on
key and when you select this op on: If the forecast is reduced completely, the forecast
requirements for the current forecast become 0 (zero); If there is no future forecast, forecast
requirements from the last forecast that was entered are reduced; Time fences are included in
the forecast reduc on calcula on; Posi ve days are included in the forecast reduc on
calcula on; If actual order transac ons are greater than the forecasted requirements, the
remaining transac ons are not forwarded to the next forecast period.
Planned orders.
Select the number sequence to use for picking planned orders. Each me that a planned order
is created, it is assigned a sequen al number from this number sequence. We recommend that
you give the planned orders their own number sequence, so that you can differen ate them
from other requirements.

Coverage
Select this op on to override the coverage me fence for the item during master scheduling. If
you select this op on, enter the number of days that the master scheduling calcula on should
cover requirements. The coverage me fence is calculated forward from the current date.
Requirements that occur before the current date are always processed.
Freeze
Select this op on to override the freeze me fence for the item during master scheduling. If you
select this op on, enter the number of days that planning ac vity is frozen. No new planned
orders are generated, and exis ng planned orders cannot be changed.
Firming
Select this op on to override the firming me fence for the item during master scheduling. If
you select this op on, enter the number of days that planned purchase orders and produc on
orders are automa cally firmed. The me fence is calculated forward from the master
scheduling date. An item must be associated with a vendor for automa c firming of a planned
purchase order to occur.
Explosion
Select this op on to override the explosion me fence for the item during master scheduling. If
you select this op on, enter the number of days that bills of materials (BOMs) are exploded to
calculate requirements for component items. The me fence is calculated forward from the
current date.
Forecast plan.
Select this op on to override the forecast plan me for the item during master scheduling. If
you select this op on, enter the number of days that the sales forecast from the forecast plan is
included in master scheduling.

Capacity
Select this op on to override the capacity me fence for the item during master scheduling. If
you select this op on, enter the number of days that capacity is planned for planned produc on
orders. Master scheduling uses the ac ve produc on route for the item and schedules
backward from the requirement date. If the requirement date for a planned produc on order is
outside the capacity me fence, the lead me is determined by the delivery me of the item.
The me fence is calculated forward from the current date.
Capacity
Select this op on to override the capacity me fence for the item during master scheduling. If
you select this op on, enter the number of days that capacity is planned for planned produc on
orders. Master scheduling uses the ac ve produc on route for the item and schedules
backward from the requirement date. If the requirement date for a planned produc on order is
outside the capacity me fence, the lead me is determined by the delivery me of the item.
The me fence is calculated forward from the current date.
Ac on message
Select this op on to override the ac on message me fence for the item during master
scheduling. If you select this op on, enter the number of days that master scheduling generates
ac on messages for requirements. The me fence is calculated forward from the current date.
Approved requisi ons me fence (days)
Select this op on to override the me fence se ngs that are defined for the item. In the field,
enter the number of days in the past during which demand from approved requisi ons that
have the Replenishment purpose is included in master scheduling.
Sequencing
Set the sequencing me fence for the item during master scheduling. If you select this op on,
enter the number of days that sequencing is performed.
Nega ve days
Enter the days that are added to a requirement due date. This number defines a me interval
during which a planned receipt that is due can be used to fulfill the requirement. A planned
receipt that is outside the defined me interval cannot be used to fulfill the requirement.
Master scheduling generates a new planned order. You can equate nega ve days with the
number of delivery days that are past due. During this me, there is a nega ve inventory level
for the item. You must accept the nega ve inventory level before you can create a new
fulfillment order. The value that you enter depends on factors such as item lead me and the
organiza on's policy about inventory. If an item has a long lead me, you can specify the typical
lead me as nega ve days. You can specify nega ve days in either the Item coverage page or

the Coverage groups page. The full behavior of nega ve days depends on whether you select
the Use dynamic nega ve days op on in the Master planning parameters page. For example, for
a par cular item, a purchase order is scheduled for receipt on September 20, and a sales order
is scheduled for delivery on September 19. You must specify whether to generate a new
planned purchase order to cover the requirement, or to accept a late delivery for the sales
order on September 20. If you set the nega ve days to 0 (zero), a new planned purchase order
is generated. If you set the nega ve days to a number that is larger than zero, no planned
purchase order is generated. Instead, an ac on message is generated for the purchase order,
and a futures message is generated for the sales order.
Add the calculated delay to the requirement date.

The requirement date of a transac on is the original requested date that is adjusted by safety
margins and calendar availability. If in general you can’t manually mi gate the delays calculated
by master planning, and if you want master planning to create a feasible plan, then you also
need to adjust the requirement date by the calculated delays. All transac ons have an original
requested date. By adjus ng the requirement date by the calculated delays, you don’t lose
visibility into the original request.


4.Running the master plan

Running for specific item

5.Understanding the outcome
Current stock = Box

Minimum coverage Qty = 100 Box
Maximum coverage Qty = 200 Box
Minimum order Qty = 10
Maximum order Qty = 100
Open Purchase orders = 0

Open sales order/Demand order = 0
Lead me = 20 days
Our outcome is order 1 = 100
order 2 = 50 (Total Qty is 150 to fulfill the max stock )
Delivery date = 28- Mar-2024 ( order date + lead me of 20 days)

Planning D365 F&O

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Master Planning in D365 F&O

 What raw materials and capacities are currently available?

Will be discussing Master and Forecast plan.

Page. 1 By Abhishek Jindal

To Explain it better I will use one Business cases.

Supply Forecast Plan Flow In D365

Step by Step Process

1.Create an Item in the Released Product Form.

2.Define the default order setting.

Page. 2 By Abhishek Jindal

3.Item Allocation Key

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4.Define the Supply forecast for the item

Example- Yearly requirement is 1200 Box so monthly is 100 Box

5.Supply Forecast Form

6.Methods Allocating Forecast

 None - No allocation takes place.

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 Days - Allocation corresponds to the number of days that you specify in

 Months - Allocation corresponds to the number of months that you specify in

 Years - Allocation corresponds to the number of years that you specify in

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7.Forecast Plan Setup

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9. Validate the planned orders

Either we can Firm the orders one by one altogether.

Select the orders and click on group.

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Conclusion & Recommendations

 Forecas ng is making an informed predic on about placing an order.

 Using forecas ng models such as determining to reorder points and economic

Page. 12 By Abhishek Jindal

By using master planning, you can:

 Master planning calculates requirements and results in the genera on of planned

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1. Sta c plans and dynamic plans

Step by Step Process

Eg- If yearly requirement is 1200 Boxes then monthly is 100

Minimum coverage should be = Monthly requirement

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1. Using same item and setting item coverage

2.Setting the minimum and maximum inventory as per inventory unit

Order type tells what type of planned order will be created

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Eg- order date is today

For purchase – Order date + Lead me

3.Setup a master plan

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Include on-hand inventory.

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