Inventory results not matching with analysis

[Former Member]

Hi,

I was trying to analyse the results obtained from Inventory Optimization but my results were  not matching.

Following screenshot contains the results:

As per my understanding, expected value of Recommended Safety Stock should be 164 units whereas system proposed results are 5641 units.

I am not able to understand the cause of this huge difference. Are we missing out on something?

Calculation we are using to calculate Recommended Safety Stock is given in the screenshot.

Help in this regard is highly appreciated.

Regards,

Saabitri

[Former Member]

Hi Saabitri,

Just read your post. Apologize for the late response.

This is my best guess what happened. From your screenshot, all the KF's are displayed on a daily granularity. However, if your planning area was a copy of sample SAP3 model, the calculation of recommended safety stock should have happened on the weekly granularity. For example, TLEADTIME is 4 weeks. Recommended Safety Stock is calculated using the week demand of daily demand 38 * 7 etc. In addition, please note TLEADTIMEVARIABILITY represents coefficient of variation (CV), i.e., sigma / mean.

Can you recreate your planning view using week period and check the results? It should be close to your simple formula.

Best Regards,

Lei