Product Substitution with Minimum available resource capacity

[andy_yeri]

Team:

We've 2 requirements, that to my mind, are potentially in conflict with each other.

• Product Substitution (Alternate Product being substituted from stock or Production Receipts, when main unavailable) is at the finished good level
• 100% capacity utilization a must at the resources for the next level Semi Finished good level

While the Product Sub works on the premise of unavailable supply (stock, receipts or capacity) triggering the substitution, the ask for resource capacity to be always utilized at 100% means, the Capacity is never available, rendering the "capacity unavailable" situation for Prod Substitution ineffective.

Was wanting to understand if anyone had the experience of exploring the Optimizer solution in this case.

• Does the Optimizer consider the cost parameters supplied (Production & Customer costs) in conjunction with the 100% Capacity utilization ask on the resources?
• With 100% Cap utilization @ the SFG resource, does the system do a "push production" out to the FG level ignoring the Prod Sub set up?
• Finally, if a substitute product for 1 customer if a Main product for another, how do the cost parameters adjust?

Cheers

[former_member654033]

Hi Andy,

Not sure if I have fully understood your requirement but here are my comments on your questions

Does the Optimizer consider the cost parameters supplied (Production & Customer costs) in conjunction with the 100% Capacity utilization ask on the resources?

Girish - Optimizer considers all type of costs and try to achieve solution with minimum total cost, if you want to force optimizer to achieve 100% capacity utilization them model MINCAPAUSAGE and MINCAPAUSAGEVIOLCOSTRATE Key figures. Based on the cost model it will force utilization for that resource to Minimum capacity usage.

With 100% Cap utilization @ the SFG resource, does the system do a "push production" out to the FG level ignoring the Prod Sub set up?

Girish - Everything is cost play again, so if inventoryholdingcostrate is higher at SFG level compare to FG level then it will do force production.

Finally, if a substitute product for 1 customer if a Main product for another, how do the cost parameters adjust?

Girish - It will look for total cost of fulfillment, for whatever product total fulfilment cost is lower (Main product or Substitute Product) it will use that product to meet the demand.

If you have any further question, please let me know

Thanks

Girish