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 Pre-Season Safety Stock Shift

Use

To achieve a high level of service for your customers you can bring forward the safety stock of location products with seasonal demand by shifting a higher safety stock in a later period to the current period.

Prerequisites

The system only performs the pre-season safety stock shift if the following conditions are met:

  • You perform the forecast for the relevant location product with a seasonal forecast model such as the seasonal trend model or the seasonal trend model with fixed period groupings .

  • You have set the Pre-Season Safety Stock Shift indicator in Customizing. For more information, see the Implementation Guide (IMG) for Advanced Planning and Optimization under Start of the navigation path Supply Chain Planning Next navigation step Service Parts Planning (SPP) Next navigation step Distribution Requirements Planning (DRP) Next navigation step Define Service Profile for DRP End of the navigation path .

  • You have also defined cost intervals and assigned a period number in Customizing. For more information, see the IMG for Advanced Planning and Optimization under Start of the navigation path Supply Chain Planning Next navigation step Service Parts Planning (SPP) Next navigation step Distribution Requirements Planning (DRP) Next navigation step Define Parameters for Pre-Season Safety Stock Shift End of the navigation path .

  • You have not set the No SFT Shift indicator for the relevant location product in the location product master data on the SPP DRP tab page.

Features

For location products for which you have set the pre-season safety stock shift, the system defines the safety stock as the largest of the safety stocks in the current period and in the coming periods. The number of coming periods that the system considers depends on the procurement costs of a location product. Depending on the cost interval in which the procurement costs lie, the system considers a certain number of periods when determining the largest safety stock.

Example Example

If the procurement costs of a location product lie within the cost interval of USD 1 to USD 5 that you defined and you have assigned this cost interval a period number of two, the system calculates the planned safety stock of current period X according to the following formula:

Planned SFT = MAX (SFT X ,; SFT X+1 ; SFT X+2 )

End of the example.

This following figure shows how DRP shifts the safety stock. It also shows that DRP shifts the safety stock in the case of an increase only, not a decrease.

Example

The inventory planning service has calculated the following safety stock for a location product:

Period

1

2

3

4

5

SFT

10

12

15

20

15

  • If the location product lies within a procurement cost interval to which you have assigned a period, for period 1 DRP compares the safety stock in period 1 and period 2 and chooses the largest. For period 2, DRP compares the safety stock in period 2 and period 3 and chooses the largest, and so on.

    DRP thereby determines the following result:

    • The safety stock of period 1 is 12.

      (MAX (10; 12))

    • The safety stock of period 2 is 15.

      (MAX (12; 15))

    • The safety stock of period 3 is 20.

      (MAX (15; 20))

    • The safety stock of period 4 is 20.

      (MAX (20; 15))

  • If the location product lies within a procurement cost interval to which you have assigned two period, for period 1 DRP compares the safety stock in period 1, period 2, and period 3 and chooses the largest. For period 2, DRP compares the safety stock in period 2, period 3, and period 4 and chooses the largest, and so on.

    DRP thereby determines the following result:

    • The safety stock of period 1 is 15.

      (MAX (10; 12; 15))

    • The safety stock of period 2 is 20.

      (MAX (15; 12; 20))

    • The safety stock of period 3 is 20.

      (MAX (15; 20; 15))