Use

Before the system creates stock transport requisitions as part of the inventory balancing service, it executes a cost-benefit analysis for the rounded quantity. Based on this cost-benefit analysis, the system then decides if transferring stock would be appropriate. The system compares the benefit of a stock transfer with the costs. If the benefit compared to the costs is greater than a threshold that you have defined, the system decides in favor of a stock transfer, in other words in favor of inventory balancing.

Features

The costs in the cost-benefit analysis consist of the Stock Transfer Costs that inventory balancing would entail.

The benefit of the cost-benefit analysis consists of the following:

Benefit = Savings from Reduced Stockholding Costs + Warehouse Space Savings + Savings per Prevented Loss

The system decides whether to execute inventory balancing based on the following condition:

If benefit – stock transfer costs > threshold value , the system then creates a stock transport requisition, and plans inventory balancing.

You can specify the threshold value in Customizing for Advanced Planning and Optimization , under  Supply Chain Planning Service Parts Planning (SPP) Inventory Planning Define Service Profile for Inventory Balancing .