How Rebalancing Recommendations Are Created

This topic explains how rebalancing recommendations are created for replenishment plans.

Settings That Affect the Creation of Rebalancing Recommendations

These settings affect the creation of rebalancing recommendations for a replenishment plan:

• The selections on the Inventory Rebalancing tab on the Plan Options page.

• The selections on the Manage Planning Clusters page for the clusters that are selected on the Inventory Rebalancing tab.

• The selected segments on the Scope tab on the Plan Options page.

How Rebalancing Recommendations Are Created

Oracle Replenishment Planning uses this high-level process for creating rebalancing recommendations:

1. The item-location combinations for which the process is performed are selected on the basis of these criteria:

   • The item-location combinations must be in the selected segments for the replenishment plan, and the MPS and MRP Planning Method attribute for the items should be set to Replenishment planning.

   • The locations must also be in the selected clusters for the replenishment plan.

2. The forecast is generated or imported for the replenishment plan.

3. Inventory balancing is performed for each cluster on the basis of its sequence number on the Inventory Rebalancing tab.

4. Within each cluster, locations are selected for processing as follows:

   • Locations with the highest priority (lowest number) are first processed.

   • If locations have the same priority or no priority, those with the larger inventory shortages are first processed.

   • If locations have the same priorities and inventory shortages, the locations are processed in the ascending alphanumeric order of their names.

5. For the location being processed, the following steps are taken:

   • The windows for computation of the excess inventory and inventory shortage for each item in the location are determined.

   • The excess inventory or inventory shortage for each item is calculated.

   • Rebalancing recommendations are created for each item according to the inventory rebalancing rules specified on the Inventory Rebalancing tab:

     • If the Reduce partial recommendations check box is selected, a search is performed for the nearest location with enough excess inventory to completely meet the inventory shortage at the location being processed.

       The proximity between the location being processed and any location with excess inventory is determined through the use of the transfer lead time that's specified in the shipping method between the locations.

       If no location has enough excess inventory to completely meet the inventory shortage, the nearest location with excess inventory to partially meet the inventory shortage is selected.

       If the transfer lead times between the location being processed and two locations with excess inventory is the same, the location with more excess inventory is selected.

       If there are multiple shipping methods between the locations, and a default shipping method isn't defined, the shipping method with the shortest lead time is selected. If different shipping methods have the same lead time, the first shipping method in the ascending alphanumeric order of names is selected.

       Note: If there's no shipping method between the locations, no rebalancing recommendations are created.

     • If the Include safety stock in shortage calculation check box is selected on the Inventory Rebalancing tab, the safety stock for the item is included in the calculation of the inventory shortage for the item-location combination.

       At the end of the shortage window for the item-location combination, the safety stock is subtracted from the value of the Projected Inventory measure for calculation of the inventory shortage. If the resulting value is less than zero for the item-location combination, that value is considered as the shortage.

6. After all the locations in the cluster are processed, if the Move excess to sweep location check box is selected on the Inventory Rebalancing tab, the excess inventory from locations is moved to a sweep location that may or may not be in the cluster.

   If the cluster has a sweep location in another cluster, and the excess inventory is moved to the sweep location, a planned inbound order is created for the sweep location.

7. After inventory rebalancing is performed for the cluster, the next cluster is selected on the basis of its assigned sequence number.

   All the clusters selected on the Inventory Rebalancing tab are processed in this manner.

8. If the Release planned orders automatically check box is selected on the General subtab on the Supply tab on the Plan Options page, the planned orders with order dates within the release time fence are automatically released.

   The release recommendation parameters specified on the General tab in the Supply: Advanced Options dialog box that you open from the General subtab on the Supply tab are adhered to.

   Note: The planned orders can also be manually released on the Manage Rebalancing Recommendations page.

9. The measures and analytics for the replenishment plan are calculated.