Enhance Service Level-Based Calculation of Safety Stock

The changes in this update will ensure that the service level-based calculation of safety stock in Oracle Supply Planning is identical to that in Oracle Replenishment Planning.

The average daily demand and replenishment lead time are key parameters used in the service level-based calculation of safety stock.

The changes include the following:

  • The calculation of average daily demand in Supply Planning will now consider holidays.

Here is an example for the calculation of average daily demand in which the horizon for calculation is eight days, and the organization manufacturing calendar has five working days with Saturday and Sunday being holidays.

Example for Calculation of Average Daily Demand

Example for Calculation of Average Daily Demand

Total demand within the horizon = 70 + 84 = 154 (note that holidays aren’t considered)

Average daily demand = 154/8 = 19.25

  • The calculation of replenishment lead time in Supply Planning will now consider transit time as shown below:
    • For a buy order, the replenishment lead time is the sum of the preprocessing time, processing time, transit lead time, and postprocessing time.
    • For a transfer order, the replenishment lead time is the sum of the preprocessing time, transit time, and postprocessing time.

Previously, in Supply Planning, during the calculation of replenishment lead time for buy orders and transfer orders, the transit time wasn’t considered while the other components for the calculation were considered.

NOTE: Replenishment Planning already supported these calculations for average daily demand and replenishment lead time. Hence, no change is required.

Further, during the service level-based calculation of safety stock, for replenishment plans (single echelon and multiechelon) and supply plans, if multiple Rank 1 sources of supply exist, the total replenishment lead time is computed as a weighted average across the supply sources. With this update, this behavior will be the default for both Replenishment Planning and Supply Planning.

Steps to Enable

You don't need to do anything to enable this feature.

Access Requirements

Users who are assigned a configured job role that contains these privileges can access this feature:

  • Manage Segments (MSC_MANAGE_SEGMENTS_PRIV)
  • Monitor Demand and Supply Planning Work Area (MSC_MONITOR_DEMAND_AND_SUPPLY_PLANNING_WORK_AREA_PRIV)\
  • Monitor Replenishment Planning Work Area (MSC_MONITOR_REPLENISHMENT_PLANNING_WORK_AREA_PRIV)
  • Monitor Supply Planning Work Area (MSC_MONITOR_SUPPLY_PLANNING_WORK_AREA_PRIV)

These privileges were available prior to this update.