Using Inventory Target Violation Cost Rate with Target Subperiods of Supply

[former_member602633]

Hello,

We are using TS Based Supply Optimizer for Supply Planning.

We are using the Target Subperiods of Supply (Days of Supply) to calculate the Additional Lotsize Policy Demand, based on the Dependent Demand. Is it possible to apply Inventory Target Violation Cost Rate to Additional Lotsize Policy Demand, which is used as an Inventory Target from planning perspective.

I know we can copy this Additional Lot Size Policy Demand into Inventory Target KF, but we will have to keep doing it every time the Dependent Demand changes. Also Optimizer would consider the addition of Additional Lotsize Policy Demand + Inventory Target to calculate the Projected Stock, which would result in double the inventory.

Is there a way where we can apply the Inventory Target Violation Cost Rate (Penalty) to meet the Additional Lotsize Policy Demand, then we can let Optimizer satisfy as much Additional Lotsize Policy Demand based on Days of Supply.

Any input is appreciated.

Thanks,

Mangesh Kulkarni

[carsten_schumm · Accepted solution]

Hello Mangesh,

no, the optimizer can't consider Additional Lot Size Policy Demand directly.
But can't this be solved by calculation the inventory target based on the Additional Lot Size Policy Demand and the existing Inventory Target?
E.g. by some maximum-logic? For this you probably have to move the existing Inventory Target contents to a new key-figure. Then compute the Inventory Target according to your requirements instead of doing a simple copy.

If this doesn't help, a small example showing the issue would be good.

Kind regards,
Carsten

[former_member602633]

Hello Carsten,

As mentioned, we don't want to keep moving the Additional Lot size Policy Demand to Inventory Target Key Figure and then make use of Inventory Violation Cost Rate. Additional Lot Size Policy Demand should also be treated as Inventory Target and hence violation cost rate should also apply for Inventory Target calculated based on Days Of Supply.

We have lot of work arounds that this can be achieved, but there is no standard solution.

Thanks,

Mangesh