Day's Supply, Stock On Hand, Safety Penalty and Delay Penalty

[Former Member]

Hi All,

1. Day's Supply and Stock Hand at the Distribution Center

Checking the planning book, does the stock on hand KF represent also the day's supply? or only the receipts?

ex. of what i see in the planning book:

receipt = 100, stock on hand = 100, day's supply = 7

There is also a case where I see 128 days as my day's supply but i have no stock on hand.

How is the day's supply determined? How do I know the number of stocks it represent?

2. Safety Penalty and Delay Penalty

If my safety penalty is higher than my delay penalty, will it be true that it will prioritize to meet the required safety stock rather than the demand?

Hope someone can help me on this.

Thanks a lot.

[Former Member]

Hi

At conceptual level Safety days of supply mean for how many Work days of demand in future can be covered by the Stock on Hand.

Let say your stock on hand is 1000

and your future demand look like below

Today 100

D+1 150

D+2 200

D+3 100

D+4 150

D+5 200

D+6 100

D+7 200

Now stock of 1000 will cover next 6 days hence days of supply will be 6 days. There is also factor of work days come in to place if you are working on monthly bucket/weekly bucket .

2. Delay penalty Vs Safety stock penalty

Here you also need to consider two other factor . No delivery penalty and maximum delay allowed.

If Safety stock penalty is greater than delay penalty but less than No delivery penalty , in this case system will try to keep safety stock and delay the supply against demand till the maximum delay period. Also need to consider product storage cost.

If safety stock penalty is greater than no delivery penalty then system will first fulfill safety stock requirement and if only excess supply available then fulfill the demand.

Regards

[Former Member]

Thanks PATHAN Mahadalikhan.

Additional Question.

What if,

D1

Demand 300

SOH 500

Day's Supply 7

D2

Demand 300

SOH 200

Day's Supply 7

D3

Demand 200

SOH

Day's Supply 7

D4

Demand 0

SOH 0

Day's Supply 7

D5

Demand 0

SOH 0

Day's Supply 7

D6

Demand 0

SOH 0

Day's Supply 7

*this will be like this until the end of the plan.

What can be the reason behind the day's supply reflected even if there is no more demand and Stock on hand?

Thanks.