Re: Dynamic Min Balance

This response relates to the following e-mail from Kusman Lim:
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Subj:    Dynamic Min Balance
Date:   12/21/99 12:46:23 AM Pacific Standard Time
From:   KUSMAN@TAKEDA-ID.com (Kusman Lim)
Sender: owner-bpcs-l@midrange.com
Reply-to:   BPCS-L@midrange.com
To: BPCS-L@midrange.com (BPCSL)

Dear BPCS Expert;

We use 6002plf cum March 98 C/S.
Can any body explain me how the BPCS calculate min balance if we use
order demand GREATER FORECAST or ORDER.
And we have customer order 100 unit and forecase 90 unit/month.
Our Min Balance Horizon days : 180 and Min Bal Day 15.

Thanks in advance.

Regards

Kusman Lim

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Kusman:

The Minimum Balance field is used in MPS/MRP calculations as the minimum 
Onhand Balance that must be maintained.  As MRP calculates projected Onhand 
over time, it creates Planned Orders that will insure that the Minimum 
Balance will be planned.  This Minimum Balance is a fixed quantity that is 
maintained in the Item Master File (default) and in the Facility Planning 
File (which is used in MPS/MRP).

The concept of Dynamic Minimum Balance in BPCS involves updating the Minimum 
Balance based on the projected demand over a specific period of time.  The 
following steps occur:

1.  The calculation uses the Min Balance Horizon Days (180 in your example) 
and the Minimum Balance Days (15 in your example).

2.  When MPS/MRP is run, the program sums up the demand from the MRP Start 
Date through the Min Bal Horizon Days.  In your example, the Forecast is 
90/mo, but you have 100 in Customer Orders and demand is the Greater of 
Forecast or Orders.  The Total Demand for 180 days (i.e. 6 months) would be:

100+90+90+90+90+90 = 550

3.  With a 15 day Minimum Balance Days, the calculation would be:

(Total Demand  /  Min Bal Horizon Days )  x  Min Balance Days = Dynamic Min 
Bal.

(550 / 180) x 15 = 45.833

4.  The Fixed Minimum Balance field is then REPLACED with 45.833 and this 
value is used for MPS/MRP.

NOTE:  This calculation is performed EACH time that MPS/MRP is run and the 
Minimum Balance field is therefore updated EACH time.

You need to be careful when to use Dynamic Minimum Balance.

I hope that this explanation help.  Please feel free to contact me further if 
you have any questions. I can be reached via e-mail (LMittman@aol.com) or at 
my office (847) 831-9388.

Thanks.

Les Mittman
BSI Consulting, Inc.
(Specializing in BPCS implementation and support for 17 years)


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