Automatically calculate safety stock values

The program (R3425) is used to automatically calculate safety stock values, thereby maintaining optimal inventory levels to reduce stock-outs and excess inventory.

The program can be run in two modes:

Proof

The calculated safety stock values are written to the Safety Stock Message File (F3425), Work with Safety Stock Messages program (P3425) is used to review and edit the calculated safety stock values prior to update.

Final

Safety Stock (SAFE) values in the Item Branch file (F4102) are updated immediately with the calculated values.

When R3425 is run, the system calculates safety stock values using one of the following three formulas

Specified Percentage of Leadtime Demand formula
This formula calculates the demand per day from either item ledger data or MRP data, multiplies by the days defined in the Level Leadtime field of F4102 and then the value in the Safety Stock Percentage of Leadtime Demand processing option.
Specified Days of Demand formula
This formula calculates the demand per day over a nominated period of days (say 365) and multiplies that by the Safety Stock Days (of cover) in the processing options. This formula can use either item ledger data or MRP data for calculating the demand per day.
Buyer's Guide formula
With this formula, the system calculates the safety stock utilising annual sales for the last 12 months and the item lead time.

Example configuration and output

In this example, we have used the Specified Days of Demand formula i.e. days of cover which is pretty common. The configuration is set to provide 30 days of cover (Option 2 = 30), via the Days of Demand calculation (Option 1 = 1), based on the last 365 days of data (Option 5 = 365) and historical data (Option 4 = Blank). The history will be based on doc types nominated in Option 6.

For each branch/item combination selected (in proof mode) a safety stock message will be generated as below, messages are processed to update the F4102.SAFE value for the item.