Re: Fading out products.

Roel,

Please consider the following:

    If you set your "Minimum Balance Horizon Days" (for example 30 days)
then the system             looks at your demand for the next 30 days and
determines how much a days' worth of             inventory is.  The"
"Minimum Balance Days" are then set to however many days you want         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. When
the demand goes away, so will the amount for     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".

The trick is to figure out exactly what the best combination of Horizon Days
and Minimum Balance Days is for you.  The 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"you place the Horizon Days the smoother the
demand will be.  But 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 the inventory.

I hope this helps in your decision making.  I also hope I said this
correctly, because it is part of the education that I am doing tomorrow.  If
you have any questions please, email me at edeharde@execpc.com


Warm regards,
Ed DeHarde
Senior Consulting Director
Unbeaten Path International

----- 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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