Protective effect of Transportation Lot-size periods of coverage in IO IBP

[moggiemx79]

Hi experts, hope you're doing well.

I would like to understand the protective effect of the attribute transportation lot-size periods of coverage for simulating long replenishment cycles.

We are simulating international shipments with long replenishment cycles, and we used to use PBR to simulate the shipment cycle (every 1-2 months). That gave us the saw tooth inventory diagram we were expecting, but at the cost of asuming a longer exposure time (PBR+Lead time) that wasn't real since PBR=1 in destination ports, and that increases our safety stock, but not so much. Then we knew about this attribute called "transportation lot size periods of coverage" and started to use it for simulating the shipment cycle instead of the PBR. We got the expected saw-tooth diagram with PBR=1, but the total safety stock dropped significantly from 53k m3 in destination ports (when PBR was greater) to 6k-8k and the "Zero-lot size additional Safety Stock" increased to 36k-38k. I understand that transportation lot size periods gives us an protective effect against uncertainty similarly to what lot size does, but wasn't expecting that big change and it's difficult to explain.

Can you give me some insight into this?

Thank you very much,

Héctor

[former_member194529]

Hi Héctor,

Have you found a solution for your request?

If yes, please feel free to share it here.

Thanks,

Ivan