APO SNP optimiser is planning zero safety stock

[Former Member]

I am using APO V5.1.

I am using the SNP optimiser to plan a product at a location which has safety stock method SB with a fixed safety stock qty defined on the product master.

When I run the optimiser the safety stock qty is planned as zero, so the fixed safety stock qty is being ignored.

Is this expected behaviour?

In my scenario the demand is very stable, but I still want the system to respect the fixed safety stock qty.

Thanks for any advice on this...

[Former Member · Accepted solution]

Hi,

Did you maintain "Safety Stock Penalty" in the procurement tab of the material master in APO ?

Unless you maintain some value here. optimizer will not plan any safety stock.

Regards,

Mitesh

[former_member187488 · Accepted solution]

Hi, safety stock is not a hard constraint. You'll need to play around with "storage cost" and "safety stock penalty" setting in product master "procurement" tab. Try to set low storage cost and high safety stock penalty.

[Former Member · Accepted solution]

Hi,

To add to what Ada explained, the Safety Stock penalty cost should be greater than the cost of maintaining the safety stock.

The cost of maintaining the safety stock is the (product storage costs * Number of days in the planning horizon * Safety Stock Qty) + (Cost of producing/Procuring safety stock quantity).

For example, if the required safety stock is 20, product storage costs is 1/day, cost to produce 1 unit is 5 (maintained in PPM/PDS) and you are running optimizer for 200 days, then cost of maintaining safety stock is 20*1*200 + 20*5 =4100. In this case, your safety stock penalty should be greater than 4100 so that optimizer could plan for safety stock.

Also please ensure that in your optimizer profile you have either selected "Take Absolute deviation into account or Take relative deviation into account".

[Former Member · Accepted solution]

Hi,

As Mitesh said, Safety stock panelty should be greater then (Cost for producing safety stock+ storage cost of safety stock quantity).

To plan safety stock qantity, resource capacity should be availabl if it is inhouse.

Please maintain cost like - Nondelivery cost > delay panelty Cost > Safety stock Panelty > storage Cost

Please do this and let me know..

regards

Kishor