Inventory Segmentation per Location in NetSuite

Inventory Optimization includes a preference that changes the unit of analysis for inventory segmentation. Configure it in Inventory Management Preferences alongside ABC and 123 thresholds and the segmentation schedule. Item-location segmentation requires Advanced Item Location Configuration, while planning calculations and access remain subject to documented item, location, feature, and permission requirements.

What does the segmentation-per-location preference do?

The Calculate Inventory Segmentation per Location preference is in the General section of the Optimization Preferences subtab. The preference changes the unit of analysis used for inventory segmentation.

For an account to segment inventory by item-location, it must also use Advanced Item Location Configuration. This requirement is separate from the Inventory Optimization feature requirement.

Inventory Optimization is an Advanced Inventory Management feature. It segments eligible items by annual consumption value and demand variability, then combines an ABC category with a 123 category. Resulting segments can include combinations such as A1, A2, and C3.

How do you configure Inventory Optimization preferences?

Go to Setup > Accounting > Inventory Management Preferences, then click the Optimization Preferences subtab. Set the segmentation preference, review the category thresholds, decide whether segmentation runs on a schedule, and save the page.

The documented sequence is:

1. Set Calculate Inventory Segmentation per Location in General.
2. Review or enter the ABC threshold values.
3. Review or enter the 123 threshold values.
4. Set whether to run segmentation on a schedule.
5. Click Save.

What must be enabled before using Inventory Optimization?

Advanced Inventory Management is required for Inventory Optimization. To enable Inventory Optimization:

1. Go to Setup > Company > Setup Tasks > Enable Features.
2. Click the Items & Inventory subtab.
3. In the Inventory section, check Inventory Optimization.
4. Click Save.

Enabling Inventory Optimization does not immediately change item planning values. After enabling it, the account can include eligible Reorder Point items. The Inventory Optimization workflow also includes setting segmentation preferences, reviewing default segments, and running the related calculations.

For item-location segmentation, the account must additionally use Advanced Item Location Configuration.

Which permissions control setup and calculation access?

Access to setup pages, records, and calculations is divided across three documented permissions:

A role must have both Items and Inventory Optimization permissions to run Calculate Inventory Levels for Inventory Optimization. After Inventory Optimization is enabled and the required permission is assigned, users can review segment records and run segmentation calculations.

This separation matters when one user configures account preferences and another user performs calculations or reviews results. Access to the preference page is controlled by Accounting Preferences, while calculation access requires the two permissions above.

How do segmentation and planning calculations relate?

Inventory Optimization performs segmentation and planning-value calculations as related but distinct activities.

First, eligible items are segmented by annual consumption value and demand variability. Each segment has a default service level. That service level can be used as the default or overridden on a segment, item, or item-location.

Planning calculations use service level, demand history, lead-time history, and variability to calculate these values:

• Safety Stock Level
• Reorder Point
• Preferred Stock Level

NetSuite calculates these planning values at the item-location level for active, included Reorder Point items at locations where Make Inventory Available is checked.

Eligibility differs by calculation type:

The segmentation-per-location preference changes the segmentation unit of analysis. Planning values, however, are documented as item-location calculations for the qualifying Reorder Point items and locations described above.

What should users review when using this configuration?

Before running Inventory Optimization calculations, confirm that the account has the required features and that the relevant role has the permissions needed for setup or calculation work. For item-location segmentation, confirm that Advanced Item Location Configuration is in use.

For planning values, the documented criteria include an active, included Reorder Point item and a location where Make Inventory Available is checked. For segmentation, distinguish the broader ABC-ranking population from the narrower population that receives segments and 123 categories.

Users with access to Inventory Optimization can review segment records, segmentation tasks, event logs, and result pages. Roles running Calculate Inventory Levels for Inventory Optimization need both Items and Inventory Optimization permissions.

Organizations testing related inventory changes can also review Work Order Completion enhancements and QTable popup-list row filtering as part of their operational regression plan.

Who This Affects

• Users who configure Inventory Management Preferences: Need the Accounting Preferences permission to access the Optimization Preferences subtab.
• Users who run Inventory Optimization calculations: Need both Items and Inventory Optimization permissions to run Calculate Inventory Levels for Inventory Optimization.
• Users who review segmentation output: Need the Inventory Optimization permission for segment records, segmentation tasks, event logs, and result pages.
• Accounts using item-location segmentation: Must use Advanced Item Location Configuration in addition to the Inventory Optimization prerequisites.
• Accounts calculating planning values: Must use qualifying active, included Reorder Point items at locations where Make Inventory Available is checked.

Key Takeaways

• Calculate Inventory Segmentation per Location changes the unit of analysis for inventory segmentation.
• Configure the preference at Setup > Accounting > Inventory Management Preferences > Optimization Preferences.
• The same preferences page includes ABC thresholds, 123 thresholds, and the segmentation schedule setting.
• Inventory Optimization requires Advanced Inventory Management.
• Item-location segmentation requires Advanced Item Location Configuration.
• Segment and 123-category assignment applies only to included Reorder Point items, while planning-value calculations have additional active-item and location requirements.
• Roles running Calculate Inventory Levels for Inventory Optimization need both Items and Inventory Optimization permissions.