How Sourcing Allocation Percentages Are Used in Multiechelon Replenishment Planning
The sourcing allocation percentages that you set in sourcing rules are used during the bottom-up pass of multiechelon replenishment planning for creating unconstrained planned orders and unconstrained planned order demands.
Multiechelon replenishment planning supports sourcing allocation percentages and sourcing ranks with order modifiers.
Because of order modifiers or constraints at source locations, the sourcing allocation percentages might not be adhered to during the creation of unconstrained planned orders. However, an attempt is made to honor the cumulative percentages for sourcing allocations within the planning horizon.
Consider an organization named S1 that has source locations named M1 and M2. The sourcing allocation percentage for M1 is 40%, while that for M2 is 60%. Both M1 and M2 have a sourcing rank of 1. An unconstrained planned order of 100 units is placed on S1 on days 1, 5, and 9.
On day 1, when the projected available balance for M1 is 70 units, and that for M2 is also 70 units, the allocation is done according to the specified percentages. The value of the Unconstrained Planned Order Demand measure for M1 is 40, while the measure value for M2 is 60.
On day 5, when the projected available balance for M1 is 30 units, and that for M2 is 80 units, the value of the Unconstrained Planned Order Demand measure for M1 is 30, while the measure value for M2 is 70.
On day 9, when the projected available balance for M1 is 65 units, and that for M2 is 55 units, the value of the Unconstrained Planned Order Demand measure for M1 is 50, while the measure value for M2 is 50. The measure value for M1 has been raised so that the cumulative measure value for M1 across all three days is 40% (120 units) of the cumulative value for the planned order (300 units).
This table lists this example:
| Day | Source Location | Projected Available Balance at Source Location | Unconstrained Planned Order Demand |
|---|---|---|---|
| 1 | M1 | 70 | 40 |
| 1 | M2 | 70 | 60 |
| 5 | M1 | 30 | 30 |
| 5 | M2 | 80 | 70 |
| 9 | M1 | 65 | 50 |
| 9 | M2 | 55 | 50 |