Adv safety stock calculation Question

[Former Member]

Hello Gurus -

I have a question regarding the safety stock calculation formula which SAP uses for the method AT. The formula has 3 components to it :

Safety Stock = (1) Safety factor * (2) (Total Sigma) * (3) SQRT(LT+CT).

Where LT = Lead Time and CT = Cycle Time

If you look into the formula, only component 3 used both LT and CT. Total Sigma (component 2) is calculated using just the LT. Some formulas in other leading text books for Inventory planning use CT when calculating Total Sigma and not just LT.

Is there a reason why SAP chose to leave out CT in calculating Total Sigma?

Appreciate your help!

Varun

[Former Member · Accepted solution]

Hi Varun,

Go to the se37 transaction and type /SAPAPO/MSDP_SB_ALPHA_T_ALGO for algorithm for AT. You would find that even the sigma takes CT and LT.

Hope this would help.

Tarun Jha