How RECOMMENDEDSAFETYSTOCK calculated

[pk1006]

Hello All,

How RECOMMENDEDSAFETYSTOCK is calculated in IO? Is there calculation/formula to validate the outcome of IO run?

Thanks

PK

[pk1006]

Thanks, Chris. SAFETYSTOCKDEMANDVAR directed me to find other similar KFs and now at least have some explanation, better than nothing. here are other two KFs that makes recommended safety stock;

thanks for you help.

PK

[chris_topf]

You can refer to this kba about the variability safety stock key figures: https://launchpad.support.sap.com/#/notes/2610582.

It contains a link to a blog when the key figures were first created. It won't provide calculations to validate the other variability key figures, but you get perhaps another aspect of how to use those key figures.

Kind regards,
Chris

[chris_topf]

Hello Pradeep,

many of the formulas used by IO are not shared as they are proprietary information. However, there is a formula that you can use to validate the value of SAFETYSTOCKDEMANDVAR, or Safety Stock due to Demand Variability. Please refer to the following kba, which has a link to a detailed wiki with the formula: https://launchpad.support.sap.com/#/notes/2490214

Note that the calculation applies to a single-stage supply chain using Normal distribution, but it will help you validate safety stock due to demand variability.

Kind regards,
Chris