Calculate Buffer Zones

Explanation

This activity is used to calculate buffer zones based on the unprotected lead time, lead time category and variability category. Further minimum lot size and imposed order cycle will also be considered. As a result of performing this job, Green Zone, Yellow Zone and Red zone will be established for parts with Auto Update buffer levels allowed.

After this process is executed Buffer Zones will be determined as below. If any Adjustments are applicable then they will also affect the buffer zone calculations as well.

Green Zone will be established based on the maximum of the following equations:

Yellow Zone will be established by calculating:

Red Zone will be calculated as the sum of Red Base and Red Safety, which is calculated as below:

Prerequisites

System Effects