- Select the Simulate ROP/SST calculation menu item.
- On the ROP/SST calculation simulation panel, enter an item/warehouse combination to be used in the simulation. Complete the following field as well:
- Period start date
- Indicate if you want to use the period start date for this simulation. This date is used for retrieving forecast from a certain date, to give an estimation of demand during a certain time.
- If YES, then the first day of the present forecast period will be used as start date. This is the way ROP/SST is calculated in the Inventory calculations program.
- If NO, then today’s date will be used as start date. This is the way ROP/SST is calculated in the Create purchase suggestion program.
- You access ROP/SST calculation simulation. On this panel you select the method, and establish the parameters that you want to use to calculate the simulated ROP/SST for the item/warehouse combination displayed in the header.
- Service based
- Demand based
- You access ROP/SST calculation simulation again.
Click OK.
Select method
See About reorder point and safety stock (DC1 Inventory Control) for a description of the calculation methods.
Enter parameters
The panel displays existing ROP/SST information that is retrieved from Work with service control codes. If you want to use other values in this simulation, you can change the information manually, or click Select service codes to retrieve another record from Work with service control codes.
When using the Service based calculation method, the actual safety stock level is determined largely by the accuracy of the forecast. If MAD is close to zero or zero, the system will assume that your forecast is always correct. The result will be little or no safety stock, despite any service level that may be defined. Also, if MAD is unusually high, as it might be for new items before the forecast calculation has enough historic periods to be able to calculate a proper future forecast, the system will generate a safety stock that is unnecessarily high.
To establish some boundaries for the service based calculations to work within, enter a Minimum fraction % and/or Maximum fraction %. This instructs the system to use that percentage against the forecasted demand within the planning time as your minimum and/or maximum safety stock level. This provides a “safety net” when you are using the Service based calculation method ensuring that you never get a safety stock that is lower than the entered minimum fraction % of demand during planning time, and likewise never a safety stock that is greater than the entered maximum fraction %.
You can also enter some additional parameters that are necessary for the ROP/SST calculation. Note: See the Panel help for detailed information for all fields. Click OK.
Calculated values
The result of the simulation is displayed in this section. These values reflect the method and parameters you have selected for the calculation. See Inventory control formulas for information about how the EOQ values are calculated. Exit the routine.