Hello,
Check the documentation from the F1 Help below, it explains about all Safety Stocks methods, even BT:
Use
There are various safety stock calculation methods:
Standard methods
Extended methods
Standard Methods
You use these methods to define the amount of safety stock and the safety days' supply in a direct and simple manner. Both of these parameters can be defined as period-based or not period-based. You can define the parameters that are not period-based directly in the location product master (on the Lot Size tab page). You define the parameters that are period-based in interactive Supply Network Planning (SNP).
Period-based Not period-based
Safety stock MB SB
Safety days' supply MZ SZ
Maximum from both MM SM
Extended Methods
The system uses these methods to calculate period-based safety stock based on a forecast error and the service level specified. There are four different methods available depending on the lot-sizing procedure and service level chosen:
Reorder point method Reorder cycle method
Alpha service level AS AT
Beta service level BS BT
The alpha service level is event driven. Crucial here is the number of periods in which no shortfall quantities are expected. For example, if there is a service level of 90%, no shortfall quantities are expected in 90% of the periods.
The beta service level is shortfall quantity driven. It is calculated as follows: The expected fulfilled demand is divided by the expected total demand. For example, if the expected total demand is 100 pieces and a beta service level of 90% has been specified, the expected fulfilled demand is 90 pieces.
In the reorder cycle method, it is indicated that purchase orders can only be made for all t periods.
In the reorder point method, a purchase order is generated within the framework of SNP planning depending on stock level.
Dependencies
It is a prerequisite of the extended safety stock calculation methods that the uncertainties in the supply chain (referring to demand in different periods and locations as well as production and transportation times) are statistically independent from one another. It is also required that stock shortfalls are eventually delivered (backorder case).
In the case of the safety stock method MM, the SNP optimizer only takes account of independent demands, and dependent demands and distribution demands that result from fixed orders, since these demands and demand locations are already known before the optimization run.
Regards,
Michel Bohn
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