Dynamic Safety Stock can be used to determine the Safety Stock level
The Dynamic Safety Stock is calculated by the formula
Dynamic Safety Stock = Average Daily Requirement * Range Of Coverage
The Range of Coverage Profile consists of the parameters which are maintained to calculate the Dynamic Safety Stock. The parameters maintained are based on the number of days for which the material availability is required. Here the number of days is taken in the range of coverage for which the material must be available. Subsequently based on this coverage profile system calculates requirements in MRP Evaluations & creates the order proposals
1. Maintain the Range of coverage profile (T:code: OMIA)
Same coverage profile maintained in material master MRP2 view
Type of Per length =1 (Workdays) consider the factory calendar
=2 (Calendar Days) Consider Total calendar days
1. Requirement of three month, (Oct,Nov,Dec), Here system consider three month because of Period maintained in coverage profile is “3”
(40+100+120)/ (3 (Period) X 20 (Standard Days of each period)) = 4.33 Requirement/day
4.33 x 3 (Target days of first range of coverage profile) = 13 Qty (Period 1)
For first month requirement is 40+13 =53 Qty, system generate the Planned order for same qty
2. Now, for month(Nov, Dec, and Jan)
(100+120+60)/3X20 = 4.7 Requirement/day
4.7 X 3=15 (Period 2 )
3. Now for month (Dec, Jan and Feb)
(120+60+80)/3X20 = 4.3 Requirement/day
4.3X3= 13 (Period 3)
Note: Target days 3 consider three times because of no of period 3 maintained in first range of coverage profile. After 3 period systems consider target days 5
4. Now for Month (Jan, Feb)
(60+80)/3x20 = 2.33 Requirement/day
2.33*5 (Target days of second range of coverage profile) = 12 (Period 4)
5. Now for month (Feb)
80/3x20 = 1.33 Requirement/day
1.33*5 = 7 (Period 5)
Please refer below snap for detail information
I hope this document helpful to you understand the basic of Dynamic safety stock calculation
Request to expert review and suggest if any thing wrong and missing in this document
Regards
Umesh Mali
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
User | Count |
---|---|
5 | |
2 | |
2 | |
2 | |
2 | |
2 | |
2 | |
1 | |
1 | |
1 |