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author's profile photo Former Member
Former Member

SNP problem

Hello everyone,

I need some help with SNP optimization.

I have three concerns, supply shortages, resource utilization and demand.

I am having troubles with supply shortages. most of the products in my optimization have supply shortages present. i have set day's supply for all and this is being met rather than not having shortages. no delivery penalty is the highest cost.

what can be possible reasons of these supply shortages? how can i eliminate them?

for the resources, there are times that not all resources are being utilized. this has been set as 100% utilization and 0 loss factor. how can i make these resources be maximized to help lessen the shortages?

last is the demand. i have 3 locations. A(plant) B(DC) C(customer). the demand from C will be required in B and then to A to be produced. does the demand change until it is required in A? or the demand for a day should be the same for the 3?

i would appreciate all your suggestions and recommendations.

thanks.

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1 Answer

  • author's profile photo Former Member
    Former Member
    Posted on Jun 18, 2008 at 12:31 PM

    Hi

    For your first issue, you need to balance the non-delivery penalty against the "total" cost of not meeting the safety days'. I am not sure if you have "Take period length into account", as this can exacerbate the issue as well.

    If you are having shortages of stock then the optimizer will have to have non-deliveries at some point and hence this cost is there and will be considered, so the optimiser tends to have a shortage up front and take this "hit" straight away versus having the costs of not meeting safety every period (or indeed every day).

    Therefore:

    If non-deleivery = 1000

    safety stock violation = 10

    "period length into account"=yes

    Then for every monthly bucket under safety there is 10 x 30 = 300 penalty

    So if this shortage continues for > 3 monthly buckets then the optimiser will have the non-delivery and try and maintain the safety instead.

    Hope that makes sense

    Regards

    Ian

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    • Former Member Former Member

      Hi

      If you have weekly buckets, then you have the option to "charge" the safety penalty once for the period (eg this is unchecked) or for every working day of the period (box checked). So with this checked the penalty for safety violation will be vastly greater for your weekly buckets, it will make no difference for the daily periods.

      Regards

      Ian

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