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Former Member
Feb 24, 2011 at 01:45 PM

Automatic Safety Stock calculation based on Forecasted demand


Hi everyone,

I am a relatively new SC professional with limited experience with SAP.

I work in a company and we want to start setting Safety stocks automatically for some of the raw materials (components).

The problem is that there are no historical forecasts stored in the system. Thus, it is not possible to have the SS calculated based on Forecast error.

Now we are using a "textbook" formula and feed the results once a month to the system:

SS= SafetyFactor * StDev(Forecasted Demand) *Sqrt(Leadtime).

We use an Horizon of 6 months in the future to calculate the StDev(forecasted Demand)

Is there any way in APO that we can do this automatically?

"additional safety stock" seems to offer a solution which seems similar to what we are seeking but I am not sure.

Thank you in advance.