Demand variability for safety stock calculation

[Former Member]

I am using APO version 5.

For safety stock calculation, one important parameter is 'demand variability'.

Theory suggests this is based on the comparison of the actual sales for a period with the past forecast made for that period.

But could one instead compare actual sales with the 'ex post' forecast quantity?

Thanks,

Bob Austin

[Former Member · Accepted solution]

Hi Bob

I suppose in SCM 5.0, if you go to the transaction /sapapo/msdp_sb, in the historical demand block, you should be able to define the KF that will be your actual demand (KF for demand forecast) and your realized demand(KF for actual demand)

[Former Member · Accepted solution]

Hi Bob.

What you are suggesting is entireley feasible. I have the same issue and have done exactly what you suggest.

Create a key figure to store the ex-post. In /SAPAPO/MSDP_ADMIN open your planning area. On the menu select Extras->Forecast settings and assign you key figure to Ex-post.

Running the forecast will now update the key figure with the ex-post.

When running the safety stock calculation, put the ex-post forecast in as the forecast and history in as the actual.

Demand variance will now calculate ex-post forecast v sales history.

A practical approach when there is history of previous forecast.

Hope this helps.

M

[Former Member · Accepted solution]

Mark,

Thanks for this.

I guess you meant 'A practical approach when there is <u>NO</u> history of previous forecast' in your penultimate sentence?

Regards,

Bob.

[Former Member · Accepted solution]

Hi Bob.

Agreed, a word is missing, I was thinking insufficient rather than no as there will be a period where forecasting has been taking place in the system but not for long enough.

cheers, M

[Former Member · Accepted solution]

you can also put the Demand variability in masterdata for the location product as

Demand Fcast Err.(%) in the lot size tab