Definition of the Business Goals 

Use

If you want to create an optimization-based production plan with the automatic cost generation function, first define your business goals for planning. The system then uses these goals to automatically generate the corresponding control costs, based on which the optimizer makes planning decisions.

The main goal of planning is to maximize the service level. You can also define the following additional goals:

·        Consideration of demand and product priorities

·        Consideration of procurement priorities

You define these goals in the SNP or deployment optimizer profile on the Automatic Cost Generation tab page.

Features

Consideration of demand and product priorities

You can define priorities for three different priority classes of the demand and the safety stock:

·        Customer demand

·        Corrected demand forecast

·        Demand forecast

·        Safety stock

The standard setting is that all priority classes and the safety stock have the same priority.

In addition, you can define that the system also considers the priority of products. You can enter this priority in the master data of the location product on the SNP 2 tab page. The system considers the product priority in combination with the demand priority. You can define which priority is more important and is to be considered by the system first.

To simplify this combination of both priority types, you must also subdivide the product priorities into three classes of A, B, and C products.

The following figure shows exactly how the system proceeds if the demand priority is more important than the product priority or vice versa:

If the demand priority is more important than the product priority, the system covers all the demand with priority class 1 (such as customer demand) for all location products first. It then covers all the demand with priority class 2, and so on. If the product priority is more important, the system covers all the demand of all priority classes for the location products with class A first, then all the demand for the location products with class B, and so on.

Consideration of procurement priorities

You can define that the system considers the procurement priorities of production process models (PPMs) or production data structures (PDS) as well as transportation lanes. You define this priority in the master data of the PPMs/PDS and transportation lanes (specific to the product). The procurement priority of sources of supply for in-house production is always more important than the priority of sources of supply for external procurement (same as the SNP heuristic procedure).

The system always tries to first cover all the demand of a period with receipts from all the sources of supply available in this period (in the sequence of the procurement priority of these sources of supply). Only after this does it try to cover the demand with receipts from sources of supply from an earlier period. If the system has to switch to an earlier or later period, it may not be able to follow this principle in this period.