RE: RE: Minimum balance

[Ruben Orozco <rorozcom@xxxxxxxxx>]

Setting your inventory level at a quantity equal to the demand for the next 'n' periods, is equivalent to producing that demand 'n' periods ahead of time. Think about it. That is why Safety Time is a valid technique in these cases.

  "Damon, Mitch" <MDamon@agrilinkfoods.com> wrote:

Referring to the 9th edition of the APICS dictionary I see that the term
safety time is actually a quantity of time added to the lead time to
compensate for the variability of normal lead times. Safety stock is
designed to compensate for variability of supply and/or demand regardless of
how it is calculated. Our intent by using BPCS's Minimum Balance Horizon
and Minimum Balance Days fields is to provide for a minimum balance, or
safety stock, which is based on the level of demand in general as well as
the level of uncertainty. This is necessary since our seasonally can
increase the demand by an order of magnitude.
I am not sure I understand how the lead time to achieve this effect.

Mitch Damon, CPIM
Planning Systems Manager
Logistics - Rochester, NY
(716) 383-1070 ext.250


-----Original Message-----
From: Ruben Orozco [SMTP:rorozcom@yahoo.com]
Sent: Wednesday, October 11, 2000 2:58 PM
To: BPCS-L@midrange.com
Subject: Fwd: RE: Minimum balance

If BPCS calculated the dynamic minimum balance every time a net
requirement existed, instead of only once per run (ie static), you would
have what is also called "Safety Time" rather than "Safety Stock". One way
to produce this effect without modifying any code in BPCS is to use DRP,
where you would add the safety time you want (in addition to what you have
as minimum balance) within your distribution lead times (both in the
Facility Planning Master and the DRP relationships).


Hope this tip works for you.





Ruben Orozco, CPIM
iWork Software, LLC
7900-200 Triad Center Dr
Greensboro, NC 27409
(336) 217-6110 ext 5882




Note: forwarded message attached.



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