IBP Optimiser proposed Projected Stock not strictly respecting Inventory Target

[brienne_tang74]

Dear Experts,

Would require your guidance on what basis or parameters that Optimiser will not strictly followed Inventory target require at Product-Location level in the same time period?

For example: Optimiser propose projected stock of 60 instead of 71. Net Demand = 100 cases proposed by Optimiser instead of 200 cases, reducing the inventory target by 11 cases.

Thank you in advance

[carsten_schumm]

Hello Brienne,

how is your cost setup? Maybe it is less costly to violate the inventory targets than to have the extra inventory.
In W2 we have 11 * inventory violation cost rate plus 60 * inventory holding cost rate.
When 200 would be supplied, there would arise 160 * inventory holding cost rate (plus likely additionally production/transport costs).
The optimizer will choose the overall solution with the least costs in total.

BR, Carsten