Additional Safety Stock

For the combined planning of the economic order quantity (EOQ) and safety stock (SFT), you can define additional safety stock that the system takes into account during planning.

Features

You can specify the additional safety stock either on the Values of Target SFT and Target Service Level screen or in the location product master data on the SPP Inventory Planning tab page in the Addl. Safety Stock field. If you specify the additional safety stock in both locations, the system selects the value that you specified on the Values of Target SFT and Target Service Level screen. You can access this screen from the SAP Easy Access menu by choosing Start of the navigation path Advanced Planning and Optimization Next navigation step Service Parts Planning (SPP) Planning Inventory Planning EOQ and Safety Stock End of the navigation path .

If you have not specified a value for the additional safety stock on the Values of Target SFT and Target Service Level screen or in the location product master data and you execute combined planning of EOQ and SFT using Poisson distribution, the system calculates the additional safety stock using the following formula:

This graphic is explained in the accompanying text.

k is a statistical factor that you can specify on the SAP Easy Access screen under Advanced Planning and Optimization Service Parts Planning (SPP) Planning Inventory Planning EOQ and Safety Stock Values of Target SFT and Target Service Level in the Add. Sfty Stk Coeff field. If you do not define k, the system does not calculate additional safety stock.
Sigma is the standard deviation, calculated by the forecast service, of the average demand size per order item.
N is the minimum number of order items that you must fulfill to reach the target service level on the basis of the order items expected during the procurement lead time.

After this calculation, the service checks whether the additional safety stock exceeds one of the limits defined by you. If the additional safety stock does exceed this limit, the system sets the additional safety stock to this limit value. You can define this limit on the SAP Easy Access screen under Values of Target SFT and Target Service Level in the Max. Add. Sfty Stk field. The system adds the additional safety stock to the safety stock depending on the setting you made in Customizing for Advanced Planning and Optimization under Start of the navigation path Supply Chain Planning Next navigation step Service Parts Planning (SPP) Planning Inventory Planning Define Service Profile for EOQ/SFT Calculation End of the navigation path . Under Define Service Profile for EOQ/SFT Calculation in the field Add Additional SFT, you can choose between the following options:

If you choose Add Additional Safety Stock, then Round to Min. Safety Stock, the system first adds the additional safety stock to the safety stock, and only then checks whether the minimum safety stock is reached and, if necessary, rounds to this minimum safety stock.
If you choose Round to Min. Safety Stock, then Add Additional Safety Stock, the system first checks whether the minimum safety stock is reached with the safety stock, rounds, if necessary, to this minimum safety stock, and only then adds the additional safety stock to the safety stock.
If you choose Do Not Use Additional Safety Stock, the system does not calculate additional safety stock.

The system saves the sum of the safety stock and the additional safety stock as the new safety stock.