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Former Member

Detail the safety stock calculation

Hi Experts

I simulkate the automatic reorder point planning.

I have used the range of profile

Period type = M, No of period =2, Type of length = 3 and days/period = 20.

Range of coverage for first period (target) = 3, no of periods= 2

RO point is 150, replenishment lead time : 40 days

Now, with different % of service levels, i am getting different values for safery stock.

Please detail the calculation of safety stock for above scenario considering 60% and 70% service levels respectively.

warm regards

ramSiva

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3 Answers

  • Best Answer
    May 22, 2010 at 07:11 AM

    Dear ,

    AS I am using the Safety stock concept in our business process , hope that the below details whih i have gained over an period of time will help you to calculate the Safety Stock .I have given an example of the Safety Stock Calcualtion .

    Frist of all please Note the following parameters are to be maintained in MRP views in FBP before safety stock calcualtion .

    1.MRP1 View : MRP Type : VV -Forecast Base Planning MRP Group -0000/0001/0002 as per ur business req.

    MRP Controller : XXX Lot Size : EX .If u want to order Mini or Max order qty , u can enter that value here .

    2.MRP2 View : Procurement Type : E/F/X based on the IH/External Prc or both , Service level Percentage : x% based on the service level of your busniess .

    This will be used in Safety Stock Calculation Automatically based on the setting you have done in customising in Check MRP Type -SPRO.If u tick Safety Stock in in cutomising -MRP Type , then it will calcualte the Safety Stock considering the service level percentage , MAD,Basic Values and Lead time in material master .

    In MRP2 view , u have to key in Lead Time : Vendor Lead time to bring the item in store and GR processing time .It will be considered in Safety Stock Calcualtion in FBP.

    3.MRP3 VIEW : Period Indicator ,:M/W based on your requirement.This will be getting copied to Forcating view in MMR

    Availabilty Check Indicator: 01 , Planning Strategy : 40

    4.MRP4 : Individual/Collective indicator : 2

    5.Forecasting View : Forecast Model , Initializing parametrs , Smoothing factors , Consumption values, Hist Period, Period per session , Control Data .

    Calculation: ( As an Example )

    SAP Formula Number : 17 SS = R x Sqrt of W x MAD

    Service Level %age: 85 Multiplier: 1.3 as per SAP Help Chart .

    Planned delivery time : 45

    Gr Processing Time (GRT) : 0

    Pur Processing time (PRT) : 0

    MAD : 278 ( From Material Master Forcasting view )

    W = ( PLDT *5/7) + GRT+PRT = 32.14 Square W = 1.22534

    SS = R x Sqrt of W x MAD = 1.31.22534 278 = 442

    Hope this will give you an idea on this .

    Regards

    JH

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    • Former Member

      Dear All,

      As new Junior SCManager, I've small challenge... it's to put Safety Stock on some FP's, knowing that each FP is consists of the components, So i've LT on FP , and Lead time on Components.

      I want to calculate SS for FP, cause our Sub-Contractor is doing somethings to reduce the LT on components.

      For this i choose this formula;

      • SS = Z(p) x √[(LTavg x σD²) + (Davg² x σLT²)]

      so the problem is that i've only the monthly Demand historical, and LT's in week's, my replenishment period is one quarter (3 months), how can i apply with this info? is it the good formula? is there another one including MoQ ? 

      until you read, please accept my most respectful greetings

      Bob

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    Former Member
    May 22, 2010 at 02:47 AM
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    Former Member
    Sep 19, 2013 at 11:30 AM

    Dear All,

    As new Junior SCManager, I've small challenge... it's to put Safety Stock on some FP's, knowing that each FP is consists of the components, So i've LT on FP , and Lead time on Components.

    I want to calculate SS for FP, cause our Sub-Contractor is doing somethings to reduce the LT on components.

    For this i choose this formula;

    • SS = Z(p) x √[(LTavg x σD²) + (Davg² x σLT²)]

    so the problem is that i've only the monthly Demand historical, and LT's in week's, my replenishment period is one quarter (3 months), how can i apply with this info? is it the good formula? is there another one including MoQ ?  

    until you read, please accept my most respectful greetings

    Bob

    Add comment
    10|10000 characters needed characters exceeded