Using extended safety stock methods with APO

[Former Member]

I am using APO 5.1, in particular extended safety stock planning, where we want to use the beta methods (BS or BT).

In our SNP heuristic planning we are using weekly buckets, with demands each week.

So, should we therefore use safety stock method BT with target days of supply (reorder cycle) = 7 days to best model this?

Any advice appreciated...

[rajkj]

Hi,

With reorder cycle method BT and target days' supply as 7 days, the system tries to create a proposal in each week bucket with a quantity equal to the difference between target stock level and stock on hand (projected) in that week bucket.  Please note that target stock value determination considers the working days of receiving calendar (i.e. 7 working days). Probably, a good idea is to set the value of target days' supply as multiple of 7 (if it makes a business sense).

With reorder point method BS, the system verifies the stock on hand (projected) in each bucket and tries to generate a proposal, if it falls below the reorder point. The proposal quantity is calculated in such a way to increase the stock on hand quantity up to target stock level. The target stock level and reorder point value calculations consider the working days of receiving calendar. Since you use weekly buckets, the macros will be executed for each bucket and calculate these values on weekly basis.

Thanks,

Rajesh