Hi Narresh,
Setup:
In the session: "Determine average requirements" you specify how the average demand will be calculated. In your case you said that you want to consider 3 months (Number of periods = 3) and you said that each month has 30 days (Type of per.length = 3 and No of Days per Period = 30).
Then in the session "Range of coverage in the first period" you said that you want to cover 30 days of daily sales with your safety stock.
Calculation:
The 1st thing that the system will calculate is your daily demand, based on your setup. In your example, the system will get the total requirement that you have in the next 3 months (30 days per month) and will divide this by 90 days (3 month of 30 days per month).
Total Requirements of the following 90 days:
- 3000 (PIR of Aug 1st)
- 3000 (PIR of Sep 1st)
- 4000 (PIR of Oct 1st)
Total = 10000 CS
Daily Requirements = 10000 CS / 90 days = 111.11 CS per day
The 2nd thing that the system does is to calculate how many cases you need to produce to get a coverage of 30 days:
Total Coverage = 30 days x 111.11 CS per day = 3333.33 CS.
So if you see the on Aug you will produce 6333.33 CS (3000 CS for your forecast and 3333.33 CS to build your Safety Stock).
Thanks and Regards,
Mariano
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