Re: Fading out products.

Roel,
The system jumbled up a cut and paste that I did.  I can't make sense out of
my own response.  I apologize.  I'll write this again with no tabs and no
cut an paste.

If you set your "Minimum Balance Horizon Days" (For example to 30 days),
then the system looks at you demand for the next 30 days.  It divides that
by the number of working days to calculate what a days' worth of inventory
is.  The "Minimum Balance Days" are then set to determine how much inventory
you wish to keep. (Say, 3 Days).

The concept is that, as the demand starts to dwindle, you will be keeping
less and less inventory in the three days of minimum balance. When the
demand goes away, so will the three days of minimum inventory.

Using 0 Horizon Days and 0 Minimum Balance Days would mean "I don't want to
see any demand and I don't want to keep any days worth of inventory. (That's
why MRP is returning safety stock = 0).

The trick is to figure out exactly what the best combination of Horizon Days
and Minimum Balance Days is for you.  The further out you place the Horizon
Days (say 180 days), the smoother the demand will be.  Bur you run the risk
of extending beyond your known demand.   The further in you make the Horizon
days, the more volatile the demand will be (more peaks and valleys).  But
you are safer to not running out of stock.

Either way the demand will drive the volume of inventory.

I hope this helps.  If you have any questions, please email me at
edeharde@execpc.com

Warm regards,

Ed DeHarde
Senior Consulting Director
Unbeaten Path International
www.unbeatenpathintl.com

----- Original Message -----
From: "Roel Bakker" <RBakker@mhimee.nl>
To: <BPCS-L@midrange.com>
Sent: Friday, February 22, 2002 7:23 AM
Subject: Fading out products.


> Hello fellow BPCS victims.
>
> We are using BPCS V6.1.1..
> My question: When a parent itemt is fading out / fasing out (let's say
> over 1 year); how can we control this easily.
> in CIC we are using dynamic minimum stock balances for components. We do
> not wish to have obsolete stock after fasing out, but if we put the
> balance days = 0 & horizon days = 0 than:
> MRP generates inmediately a safety stock = 0, which is of course
> dangerous for business, because we still have to deliver for 1 year.
>
> If we do not change the dynamic safety stock, we run the risk of
> obsolete stock, because the vendor lead time to our mother company in
> Japan is 3 months.
>
> Please let me know your advice.
>
> Thank you in avdance,
>
> Roel Bakker
> Production Planning & Procurement
> Turbocharger Division
> Mitsubishi Heavy Industries Equipment Europe B.V.
> Tel:      0031-36-5388223
> Fax:     0031-36-5388222
> E-mail: rbakker@mhimee.nl
>
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