IPR Time Phased Safety Stock Models
General
The results of an IPR Time Phased Safety Stock calculation is how much inventory that should be keept on stock as a buffer to achive the wanted service level.
Note that there exists a parameter called Max Safety Stock Cover Time this parameter are set in the planning hierarchy and is used to limit the Safety Stock so that it does not get extremely large. This fail safe are especially useful when using the a service level controlled safety stock model where unnaturally high transactions that are not marked as abnormal will result in high safety stocks. Makes the models robust and safet to use.
IPR can be used on parts with planning method B See IPR Order Point. IPR can also be used for parts with planning methods A, D, E, F, G and M it will then compute the safety stock only, and the result is written to the Safety Stock field of the inventory part or in the Time Phased Safety Strock tab on Inventory Part/Planning Data/General(Time Phased Safety Stock). See IPR Time Phased Safety Strock for details.
To determine this there are 2 different models/parameters that needs to be set
- Demand Model
- Safety Stock Model
The Demand model determines where to look for the future demand, this model has 3 settings:
Demand Model
Safety Stock Model
Note that you can see all the detailed calculations in an excel sheet, if you access the excel sheet by right clicking on the Inventory Part/Planning Data/IPR Parameters tab and seletcting one of the excel sheets.
Demand Model - Yearly Prediction
This settings simply uses the field on Inventory Part called Pred Year Cons Qty as the yearly demand for the part. Also a manual set yearly consumption.
Demand Model - History
Uses the Lead Time, Cycle Time, No of Issues in Lead Time and the Avg. Qty per Issue to compute the yearly demand.
If you look in the inventory part (Planning Data/Order Point) you will se the yearly result in the field Estimated Yearly Demand. Using this setting will be like a simple level forecast model.
Demand Model - Forecast
The future demand is fetched from the forecast from Demand Planning. The forecast will be read from this forecast in given intervals (depending on the models).
Safety Stock - Manual
Uses the manual safety stock set in the Safety Stock field on Inventory Part.
Safety Stock - Time Coverage
When Time Coverage is used the safety stock is determined based on the Safety Stock Cover Time and the Demand Model. The Safety Stock should cover the amount of days demand determined by the two. Example is you have Yearly Prediction as demand model with a yearly demand of 876 and you have 25 as Safety Stock Cover Time this will give a safety stock of (876/365*25) 60.
Safety Stock = Forecast (day) determined by the Demand Model * Safety Stock Cover Time
Safety Stock - Historical Uncertainty
Historical uncertainty uses the measured Standard Derivation in Lead Time (Expected Lead Time) together with the Service Rate compute the Safety Stock. The Service rate is the demand you have for the service level over the parts life cycle and the standard derivation states the variation of the demand during the lead time. The Standard Derivation is computed by the Analyze Demand Derivation background job in IFS.
Safety Stock = NORMINV(Service Rate) * Standard Derivation Issues in Lead Time
Safety Stock - Mean Absoulte Error
This method is similar as the Historical Uncertainty with the important difference that the Standard Derivation is fetched from the forecast in Demand Planning and used together with the Service Rate compute the Safety Stock.
Safety Stock = NORMINV(Service Rate) * SQRT(MSE in Forecast Period)