What is Formula for 'BS' Method of Extended Safety Stock Planning ?

[Former Member]

Hello SNP Experts,

I have a Important Question regarding Extended Safety Stock Planning Calculation in SNP Module.

I have read the SCM Help, SDN Forums and SNP Training Course help, but am unable to find the Formula to Calculate Safety Stocks using the Beta Service Level (Method 'BS') for the Extended Safety Stock Planning Methods.

Reading the help, training material, past SDN Questions I do understand the Standard Formula for Safety Stock is ...

S.S = ServiceLevel x SQRT (ReplLeadTime) x StdDevDemand

However there are Factors like below that are definable in the Location-Product Master ...

1. Forecast Error %

2. Replenishement Lead Time Error %

3. Min & Max Safety Stock Levels

4. Beta Service Level

5. Max. Stock Level

How are these Factors used ? What is the Formula using these Parameters to Calculate the Safety Stock ? The Calculation in SCM-APO is not clear from anywhere.

I am specifically interested in the Method "BS".

Can anyone Guide me ? Points Guaranteed if a reply covers the exact question above (I have done some research before raising this question on Forum).

Regards,

Ambrish Mathur

[Former Member]

Harish,

I'd seen these forums already. Thanks for responding.

This 'secretive' calculation is quite annoying. If SAP does not Publish any documentation around the Formula, how can the Customer be convinced to use SAP's Safety Stock Calculations (no wonder many SAP Customers are going the 'ToolsGroup' way of Safety Stock Calculations).

On Safety Factor (I saw in your notes) I am aware that

a factor of 2.33 equates to 98.6% service Level from long back based on Normal Distribution. The Formula as known much earlier is this ...

SS = SafetyFact x SQRT (RepLeadTime) x StdDevDemand.

based on Normal Distribution.

However there are new Fields in APO since ...

Is there no documentation whatsoever on how the 2 Fields - 1. Forecast Error %

2. Replenishement Lead Time Error %

are used at all in the SS Calculation ?

Where do these New MasterData Parameters Plug-in ?

The other change now is in SS Planning, the SSs could be different for each Time Bucket in Future. How does Beta Service Level also impact the Calculation ?

Is there a URL / Book someone can point me to ?

Regards,

Ambrish

[Former Member]

someone else asked this question recently

I have an open question pending on something similar from last year or so

/message/3092340#3092340 [original link is broken]

SAP would tell you the answer, if you raise a message, but you would have to take it as a consulting issue...

you can arrive at the safety factor as a constant looking at the calculation logs but its difficult to say why

(I convinced the client to take the safety factor as the godsend )

[Former Member]

APO Gurus,

Could you please respond to this Question ? We are needing to understand the Formula on how APO Calculates the Safety Stocks based on Method BS (or BT or AS or AT).

Has anybody implemented this ?

APO's use of the Factors seems to be undocumented.

Please help.

Thanks,

Ambrish