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Jan 19, 2021 at 03:51 AM

Recursive BOM in IBP and it's impacts on TS Supply Optimizer

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Hello community,

I'm having an issue where my optimizer is pre-building too much of a finished good and some it's component on two levels.

My inventory costs are layered according to the level of the components, in a way that for example.

Holding cost FG > Holding cost Comp Level 1 > Holding cost Comp Level 2.. and so forth

After examining the Production source Item and exploding the BOM to it's lowest level I found some recusiveness in the model. Meaning a finished good as a component of it's component.

This is mostly due to the use of scrap materials.

My logic tells me that IBP and most time series models in general are not suited to handle recursive BOMs the way PP-DS does, for example, and most likely this problem should be solved by taking it out of the model.

However, I wanted to confirm my assumption is correct before suggesting to remove this.

Have anyone ever experienced this behavior on the optimizer?

Thanks and happy beginning of the year 2021 to everyone!