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 Inventory Balancing for the Products of an FFF Subset

Purpose

The inventory balancing service plans the transfer of the surplus inventory of one location product to cover the shortage of another location product. Either one of the location products - the one with the surplus as well as the one with the shortage - can be the leading product of an FFF subset. In other words, it may be that the surplus or shortage is not only due to the location product's own surplus or shortage, but rather comprised of the consolidated surplus or shortage of all products in the FFF subset. For this reason, the inventory balancing service may create substitution orders for multiple products in the FFF subset to balance a surplus or shortage.

Note Note

When the inventory balancing service is triggered for a non-leading product, the system temporarily sets that product as the leading product for distribution requirements planning.

End of the note.

Process

  1. After the inventory balancing service has balanced the surpluses and shortages within an inventory area, it checks which of the products that it is processing are leading products of an FFF subset.

    • For the location products which are not part of an FFF subset, the system executes regular inventory balancing. For further information, see Inventory Balancing .

    • For location products that are leading products of an FFF subset, the inventory balancing service proceeds as described in steps 2 and 3.

  2. When the inventory balancing service processes a location product with a surplus, and the location product is the leading product of an FFF subset, it determines the non-leading products of that FFF subset. It checks whether the non-leading products of the FFF subset are also non-leading products of the FFF subset of the shortage location. For location products to which this does not apply, the system does not perform inventory balancing. For location products to which this does apply, the system proceeds with step 3.

  3. The system performs inventory balancing. This inventory balancing differs from the inventory balancing done for products which are not part of an FFF subset in the following respects:

    • The inventory balancing service performs a cost-benefit analysis for the products of an FFF subset not just for one product, but always for all included products in the FFF subset. So the inventory balancing service calculates the following costs and savings for all included products in the FFF subset taken together:

    • The inventory balancing does not just generate stock transport orders for single products, but for several or even all the products of the FFF subset.