Re: Stocking/Ordering Policy

["Ed DeHarde" <edeharde@xxxxxxxxxx>]

Sharon,
Usually Al (MacWheel) is pretty much on target with his answers, but some of
this particular answer could cause you problems.
BPCS doesn't do exactly as your suggesting.  It uses the "Minimum Balance
Horizon Days" to look out to the future for demand rather than into the past
for history.  I'll attach the answer I gave to another request (If it
attaches correctly)

Roel,

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

I hope this also helps you, Sharon
Ed
----- Original Message -----
From: "Sharon Davies" <SharonD@SCCEUROPE.CO.UK>
To: <bpcs-l@midrange.com>
Sent: Tuesday, March 05, 2002 2:43 AM
Subject: Stocking/Ordering Policy


> We are presently prototyping BPCS for our European HQ and I am looking for
> recommendations from the group. I need to find out if there is anywhere in
> BPCS that could calculate the following as a dynamnic minimum balance. To
> get to a minimum balance on certain items. We take the last 3 months sales
> divided by the number of working days in these three months. This figure
> then is multiplied by the number of days in the month that you are working
> in which is then added to the following 15 days buffer stock (this is the
> calculation from the sales/number of working days over 3 months x 15). Any
> ideas?
>
> Sharon Davies - Information Technology Director
> STATIC CONTROL COMPONENTS (Europe) Limited
> UNIT 30, WORTON GRANGE,
> READING, BERKSHIRE,
> RG2 0TG
> United Kingdom
> Telephone: +44 (0)118 923 8800
> Fax: +44 (0)118 923 8811
> Email: sharond@scceurope.co.uk
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