How Replenishment Orders Are Calculated During Incremental Planning
This topic explains how replenishment orders are calculated when incremental planning is done.
When incremental planning is enabled for a replenishment plan, replenishment planning is done for only those item-location combinations for which there are net changes in supplies and demands. So, the runtime for the replenishment plan is less. Only actual demands (demand for sales orders, transfer orders, and inventory position) are considered during replenishment calculation, and you can't select another replenishment plan, a demand plan, or an external forecast schedule for the demand forecast.
The net change collection must be run for supplies and demands before every incremental planning run. Changed item-location combinations are identified during incremental planning only through the net change collection.
New item-location combinations aren't covered by incremental planning. For such item-location combinations, you must first run the replenishment plan again with the Refresh with current data option selected on the Parameters tab in the Run Plan dialog box. Then, incremental planning can be done for these item-location combinations in later plan runs.
In a replenishment plan that's enabled for incremental planning and end item substitution and supersession, if an item with a change in net supplies and demands is a part of a substitution or supersession chain, then the entire chain is replanned.
In a multiechelon replenishment plan that's enabled for incremental planning, if the demand or supply of an item is changed, it's replanned at all echelons. A bottom-up pass for unconstrained planning and a top-down pass for constrained planning are performed. If you change the supply or demand for an item that's part of a substitution or supersession chain, the entire chain is replanned at all echelons. A bottom-up pass for unconstrained planning and a top-down pass for constrained planning are performed.
The hold date and expiration date for an on-hand lot are supported in a replenishment plan that's enabled for incremental planning. When a day is added to the planning horizon, for an item-location combination with no change in net supplies and demands, the value of the Expired Lot Quantity measure is null.
Settings for Incremental Calculation of Replenishment Orders
For incrementally calculating replenishment orders, you must take these steps:
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On the Plan Options page for the replenishment plan, select the Enable for incremental planning and Calculate replenishments check boxes.
When you select the check boxes, the following happen:
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The Generate forecast, Calculate policy parameters, and Rebalance inventory check boxes are grayed out.
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In the Plan Parameters section on the Scope tab, Day is selected in the Planning Time Level field, and it's grayed out.
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Incremental Replenishment Planning Default Catalog is selected in the Measure Catalog field, and it's grayed out.
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To automatically release replenishment orders after incremental planning, take these steps:
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On the General subtab on the Supply tab on the Plan Options page, in Automatic Release Parameters, select the Release planned orders automatically check box.
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On the General tab in the Supply: Advanced Options dialog box that you open from the General subtab, refine the parameters for automatically releasing replenishment orders.
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In the Items table, edit the values for the Release Time Fence Type and Release Time Fence Days columns for item-location combinations as discussed in the topic titled How Replenishment Orders Are Automatically Released in this chapter.
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On the Organizations and Schedules subtab on the Supply tab, in Demand Schedules, select another replenishment plan for providing the policy parameters to the plan that you're using for incremental planning.
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On the Parameters tab on the Collect Planning Data page, select Net change in the Collection Type field.
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On the Parameters tab in the Run Plan dialog box, select Refresh with net-changed data.
When you run the replenishment plan for the first time, you must select the Refresh with current data option, and the Refresh with net-changed data option is grayed out.
How Replenishment Orders Are Calculated During Incremental Planning
In this example, replenishment orders are incrementally calculated for a replenishment plan that uses the min-max planning policy type and has a maximum quantity of 100 units, minimum quantity of 50 units, and planning horizon of 7 days.
The following table depicts how replenishment orders are incrementally calculated on Day 1 for an item-location combination:
|
Measure |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
|---|---|---|---|---|---|---|---|
|
Sales Orders |
10 |
15 |
5 |
15 |
20 |
10 |
15 |
|
On Hand |
25 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Purchase Orders |
0 |
10 |
0 |
0 |
0 |
0 |
0 |
|
Total Supply |
25 |
10 |
0 |
75 |
0 |
0 |
0 |
|
Projected Available Balance |
15 |
10 |
5 |
65 |
45 |
35 |
20 |
|
On Order |
10 |
75 |
75 |
0 |
0 |
55 |
55 |
|
Beginning Inventory Position |
25 |
85 |
80 |
65 |
45 |
90 |
75 |
|
Planned Replenishments by Order Date |
75 |
0 |
0 |
0 |
55 |
0 |
0 |
|
Planned Replenishments by Due Date |
0 |
0 |
0 |
75 |
0 |
0 |
0 |
|
Final Inventory Position |
100 |
85 |
80 |
65 |
100 |
90 |
75 |
The following is how a replenishment order is calculated for the min-max policy type:
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When the Beginning Inventory Position measure (Projected Available Balance + On Order) equals or falls below the minimum quantity, a replenishment order is triggered.
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The quantity of the replenishment order is what's required to bring the inventory up to the maximum quantity (Maximum Quantity - Beginning Inventory Position).
The Beginning Inventory Position measure is evaluated every day. On Day 1, the Beginning Inventory Position measure is 25 units, which is less than the minimum quantity of 50 units. Therefore, a replenishment order of 75 units is created (Maximum Quantity - Beginning Inventory Position). The order date is Day 1, and the item lead time is 3 days. Therefore, the Planned Replenishments by Due Date measure is updated for Day 4, while the On Order measure reflects 75 units on Days 2 and 3. On Day 4, the order is received in the inventory, and the Total Supply measure is updated.
On Days 2, 3, and 4, the Beginning Inventory Position measure is above the minimum quantity. Therefore, no new replenishments are needed. On Day 5, the Beginning Inventory Position measure is below the minimum quantity, and a replenishment order of 55 units is created.
The following table depicts how replenishment orders are incrementally calculated on Day 2 for the item-location combination:
|
Measure |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
Day 8 |
|---|---|---|---|---|---|---|---|
|
Sales Orders |
15 |
5 |
35 |
20 |
10 |
15 |
0 |
|
On Hand |
15 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Purchase Orders |
10 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Total Supply |
25 |
0 |
75 |
0 |
0 |
55 |
0 |
|
Projected Available Balance |
10 |
5 |
45 |
25 |
15 |
55 |
55 |
|
On Order |
75 |
75 |
0 |
55 |
55 |
0 |
0 |
|
Beginning Inventory Position |
85 |
80 |
45 |
80 |
70 |
55 |
55 |
|
Planned Replenishments by Order Date |
0 |
0 |
55 |
0 |
0 |
0 |
0 |
|
Planned Replenishments by Due Date |
0 |
0 |
75 |
0 |
0 |
55 |
0 |
|
Final Inventory Position |
85 |
80 |
100 |
80 |
70 |
55 |
55 |
Day 8 is added to the planning horizon. Day 4 has a new sales order. For that reason, the incremental planning is done again for the item-location combination. If there had been no change in the supply and demand for the item-location combination, the measure values for Day 7 would have been copied as the measure values for Day 8, and no incremental planning would have been done.