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Function documentationService Level Profile

 

Unforeseeable fluctuations in requirements can cause a higher demand for a product and therefore lead to stockouts. To prevent stockouts and take variations in requirements into account, the system adds a safety amount to the result of the forecast. This safety amount increases (non-linear) with your defined service level, the estimated forecast error, and the range of coverage.

Features

You can define the service level depending on the inventory turnover of a product (its selling class) or depending on the importance of a product in the assortment as a whole (by ABC classification). If the selling class or the ABC indicator of the location product changes, the system automatically uses the appropriate service level in the requirement calculation.

In addition to the service level, you can use a special service level.

The following special service levels are available:

  • Service level for new location products

    The system uses this service level if the number of sales periods for a location product is between three and six.

  • Service level for determining stockouts

    The system uses this service level to avoid stockouts in the stock period. If the forecast requirement exceeds the expected stock, including the expected goods receipts, the system issues an exception.

  • Service level for location products with an expiration date

    The system uses this service level to avoid being left with stock that is past its expiration date. The requirement calculation determines how many products will be sold by the expiration date. If the net requirement is higher than this number, the system issues an exception.

  • Service level for location products with maximum stock level

    The system uses this service level so that the permitted maximum stock level is not exceeded. The separate requirement calculation determines how many products can be ordered before the maximum stock level is exceeded. In the requirement calculation profile, you can define whether the maximum stock represents a threshold value for the requirement quantity or causes an exception to be issued (hard or soft limit).

  • Service level for location products with target range of coverage

    The system uses this service level to make sure that the minimum or maximum range of coverage is met. Depending of the target range of coverage, the system increases the requirement to cover the minimum target range of coverage or issues an exception if the maximum target range of coverage is exceeded.

  • Service level per DIF schema

    You can define this optional service level in addition to the regular service level. For the period in which the DIF occurs, this service level replaces the regular service level. You can define this service level for each selling class and ABC indicator.

  • Service level high season schema

    For periods with high seasonality (high season schema), you can define a separate service level. The FRP can determine a high season schema automatically. SAP F&R combines periods with high seasonality that exceed a defined threshold in a high season schema. You can define this service level for each selling class and ABC indicator.

Activities

You define the individual service levels in a service level profile. You assign the profile at location product level.

You can define the regular service level dependent on the ABC indicator and the selling class. The system uses the following sequence when determining the service level:

  1. Determination based on the ABC indicator and the selling class

  2. Determination based on the ABC indicator

  3. Determination based on the selling class

  4. Determination without ABC indicator and selling class

For more information about the service level profile, see the Implementation Guide (IMG) for Forecasting and Replenishment under Start of the navigation path Forecasting and Replenishment Processor Next navigation step Maintain Service Level Profiles End of the navigation path.

Example

The table below illustrates how the system calculates the service level:

ABC Indicator

Selling Classes

-

Default value

USS1

USS2

SS1

SS2

FS1

FS2

Default value

96%

-

-

90%

91%

-

-

A

-

-

-

91%

92%

97%

98%

B

94%

-

-

-

-

-

-

C

-

-

-

-

89%

-

93%

  • Location product with ABC indicator A and selling class FS1

    Considering the service level of 97%. As there is a service level defined for the combination of ABC indicator A and selling class FS1, this service level is used.

  • Location product with ABC indicator B and selling class SS2

    Considering the service level of 94%. As no service level is defined for the combination of ABC indicator B and selling class SS2, the default value for ABC indicator B is used.

  • Location product with ABC indicator C and selling class SS1

    Considering the service level of 90%. As no service level is defined for the combination of ABC indicator C and selling class SS1, and as there is no default value for the ABC indicator C, the default value for SS1 is used.

  • Location product with ABC indicator C and selling class FS1

    Considering the service level of 96%. As no service level is defined for the combination of ABC indicator C and selling class FS1, nor are there any default values for ABC indicator C and selling class FS1, the general default value is used.