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This routine allows you to calculate reorder point (ROP) and safety stock level (SST) for an item/warehouse combination under simulated conditions.
This routine is extremely useful in helping you understand how ROP/SST is calculated. You can enter as many different sets of conditions as you want, and see how these affect the ROP/SST.
Note: The calculations you make here do not result in an update of the Inventory Control system. These calculations are simulated.
- Item
- Enter the item code of the item/warehouse combination for which you want to calculate simulated ROP/SST.
- Warehouse
- Enter the warehouse code of the item/warehouse combination for which you want to calculate simulated ROP/SST.
- Period start date
- Set to YES if you want to use the period start date for this simulation. Otherwise, leave NO to use today’s date. This date is used for retrieving forecast from a certain date, to give an estimation of demand during lead time.
ROP/SST calculation simulation (INVD5102)
On this panel you select the method, and establish the parameters that you want to use to calculate the simulated ROP/SST for the item/warehouse combination displayed in the header.
When you access this panel, data already exists for an ROP/SST calculation. This data is retrieved from Work with service control codes, and represents the production method and parameters for the item/warehouse combination in this simulation. You can change any values on this panel and click OK to recalculate the simulated ROP/SST.
Function keys
| Select service codes | Use this function key to search for information on the service control code key classes defined in Work with service control codes. You can also use it to select a code from the program. If so, then the method and parameters connected to the code are defaulted to the applicable fields on this panel. The system also uses them to recalculate the safety stock for the simulation. |
- Select method
- Select the method you will use to calculate simulated ROP/SST for this item/warehouse combination. The two methods that you can choose from are listed below. You can choose only one method.
- Service based
- Indicate if you want to use the Service based method to calculate simulated ROP/SST for this item/warehouse combination.
- Demand based
- Indicate if you want to use the Demand based method to calculate simulated ROP/SST for this item/warehouse combination.
- Enter parameters
- Enter the parameters needed to calculate the simulated ROP/SST according to the ROP/SST method chosen above. You are required to complete certain fields below, depending on the selected ROP/SST method.
- Service level %
- Mandatory entry if the Service method is selected. Enter the service level you want maintain. It must be equal to or less than 100%.
- Demand fraction %
- Mandatory entry if the Demand method is selected. Enter a percentage value for demand fraction. It must be less than or equal to 100%.
- Minimum fraction %
- This field is applicable if you selected the Service based method to calculate simulated ROP/SST for this item/warehouse combination, but it is not a mandatory field. It is an optional “safety net” when you are using the Service based method so that you never get a safety stock lower than the entered minimum fraction % of demand during planning time. Optionally enter a value to be used to calculate the lower limit for SST. The value you enter is used to calculate SST as a percentage of forecasted demand during replenishment time.
- Maximum fraction %
- This field is applicable if you selected the Service based method to calculate simulated ROP/SST for this item/warehouse combination, but it is not a mandatory field. It is an optional “safety net” when you are using the Service based method so that you never get a safety stock greater than the entered maximum fraction % of demand during planning time. Optionally enter a value to be used to calculate the upper limit for SST. The value you enter is used to calculate SST as a percentage of forecasted demand during replenishment time.
Enter additional parameters
Several additional parameters are needed for calculating EOQ. These parameters are retrieved from Inventory Control and Distribution.
- Planning time
- Displays the planning time (in days), but can be changed.
- Demand planning time
- Displays the demand including the planning time, but can be changed.
- EOQ
- Displays the economic order quantity, but can be changed.
- Total MAD
- Displays the total calculated mean absolute deviation (MAD) for this item/warehouse combination, but can be changed. The total MAD is based on the comparison between the total forecast (including forecast from additional demand plans) and the total demand (including demand from additional demand plans). It is used in the Service based method to calculate SST in order to get the service level percentage to reflect the real possibility of being able to deliver, taking both the uncertainty of the forecast calculated by Inventory Control and the forecast handed over from a demand plan of type Additional forecast into consideration. Note: If demand plans of type Additional forecast are not used in your system, then the total MAD is the same as the normal MAD.
- No of workdays/per
- Displays the number of work days per period and cannot be changed.
Calculated values
After you have entered the data for this simulation, click OK to display the simulated EOQ in the field below. These values cannot be changed.
- Reorder point
- Displays the simulated reorder point value calculated according to the parameters that you established in the fields above.
- Safety stock
- Displays the simulated safety stock value calculated according to the parameters that you established in the fields above.
- G-function value
- Displays the simulated g-function value calculated according to the parameters that you established in the fields above.
- Safety factor
- Displays the simulated safety factor calculated according to the parameters that you established in the fields above.