Coverage Profile

[Ravindra_Kulkarni11]

Hello all,

Range of Coverage profile understanding document:

Coverage Profile :

Coverage profile is used for calculating the dynamic safety stock. It  is a statistical calcuation on the basis of average daily requirement.  The dynamic safety stock is calculated depending on the requirements within the specified period and the range of coverage.

Dynamic Safety Stock :

This method will take the demand fluctuation into account i.e safety stock value will change according to demand, for example PIR. It is calculated as below:

Dynamic Safety stock  = Average Daily Requirement (ADR)  ( X )

                                        Range of coverage

Average Daily requirements = Sum of Requirements in the no. of periods (/ )

no. of days in the number of periods.

Range of Coverage  = Current Stock / Average Usage per day.

Maintain in Material master as below

Configuration (SPRO)

Test case 1: requirement falling in rage of coverage in the first period , here the target is 3

Running MRP

Planned order has been created for 112 qty

Explanation:

The requirement falls in 1^st period (month that is 30 days because it is maintained with type 2 as calendar days)

The calculation formula is

Number of days= period 1 *30=30

Requirement Qty= 100

Target Range of Coverage in Period 01= 3

So, average Daily requirement =100/30= 3.33 that is 4

Safety stock requirement=4*(target 3 ) =12

So, the planned order qty is= 100 (req qty) + 12 (safety stock) that is 112

Now we will go for test 2: We will create a requirement in the maintained period in coverage profile

Here the planned order will be created for 120 qty

Explanation:

Number of days= period 1 *30=30

Requirement Qty= 100

Target Range of Coverage in Period 01= 5

So, average Daily requirement =100/30= 3.33 that is 4

Safety stock requirement=4*(target 5)=20

So, the planned order qty is= 100 + safety stock 20 that is 120

would like to share the document for easy understanding the functionality for coverage profile and the calculation of dynamic safety stock using coverage profile.

Thanks

Ravindra Kulkaarni