question about safety stock and lot-size policy

[former_member687629]

Hi expert,

I have been learning IBP for three months, and wanna ask the following.

Q1: Reading the following link, I assume that “Safety Stock” is NOT invalid when I try to use lot-size policy in SOP Heuristics Supply Planning. This is because there is not any description referring to that. Is my understanding right or not?

https://help.sap.com/viewer/feae3cea3cc549aaa9d9de7d363a83e6/2005/en-US/a1d31f561a7f410ee10000000a44...

Q2: If Q1 is yes, when using lot-size policy, I also assume that Safety Stock and Projected Stock are considered into calculation.(e.g. if the value of Safety Stock and Projected Stock are 100 and 50 respectively for Period1, the total stock in a DC would be 150.)

Q3: I would like you to give me any useful link to think the above questions. it would be highly appreciated If it had chart or examples.

Thank you.

[mkorndoerfer · Accepted solution]

Hi Kenta,

Answering your questions:

Q1: this built of safety stock means the stock will be represented by the key figure Projected Stock (PROJECTEDINVENTORY). This is the relevant key figure to represent stock after all calculations (i.e. receipts and supplies) were made. If you're referring to the inventory target (INVENTORYTARGET) key figure, then yes, both will be considered: lot size policy and inventory target.

The key figure Additional Lot-Sizing-Procedure Demand (ADDITIONALLOTSIZEDEMAND) is the "safety stock" meant in the documentation and it shows you how many additional units of a product have to be kept in stock to satisfy the demand generated by using this lot-sizing procedure.

Q2: As explained in Q1, Projected Stock is the actual stock representation key figure and safety stock is your target. Meaning, if your safety stock is 100 and your Projected Stock 50, then you're short by 50.

Q3: I'd recommend you reading the SAP Help Portal Location Product (where Projected Stock key figure is documented) and the SAP Note 2238074 - Additional information about the supply planning function for IBP for Sales and Operations, attachment "04C_IBPLotSizing.pdf".

Best regards,
Matheus

[former_member687629 · Accepted solution]

Hi Matheus,

Thank you for your quick response and your answers. Regarding Q1 and Q3, I am very satisfied. However,

Let me re-ask question 2 as I misunderstood about the relationship between KF "safety stock" and KF "projected stock". As long as I check your answer, my understanding is that the number of stock of a product in DC is the sum of inventory target and demand calculated by lot size policy. Is that right? If not, please tell me what KFs are used in calculation and its logic, which I would like to understand through the question. Thank you.

[mkorndoerfer · Accepted solution]

Hi Kenta,

Projected Stock (PROJECTEDINVENTORY) is your final stock at a product - location per period, after receiving and supplying everything that's needed. The calculation performed by the operator can be found in KBA 2876444 - IBP: How is the Key Figure Projected Stock (PROJECTEDINVENTORY) calculated?.

The Inventory Target (INVENTORYTARGET) is an input key figure, manually added by planners or via calculations, which represent your safety stock per period.

The Additional Lot-Sizing-Procedure Demand (ADDITIONALLOTSIZEDEMAND) is also a safety stock but it's an output key figure and calculated by the selected lot size policy, that shows you how many additional units of a product have to be kept in stock to satisfy the demand generated by using this lot-sizing procedure.

So, in the end, both inventory target and ADDITIONALLOTSIZEDEMAND are safety stock but not the same key figures. And the projected stock will always try to meet them.

Best regards,
Matheus

[former_member687629 · Accepted solution]

Hi Matheus,

I highly appreciate your kindness. Thank you so much!!

Kenta Kono

[kendw17 · Accepted solution]

Hi, This is the closest thing I have seen to answering my question. I still don't understand if ADDITIONALLOTSIZEDEMAND and INVENGTORYTARGET both have values does it try to keep projected inventory above the largest of the two, one of them or the sum of both of them?