Policy Profiles in Min-Max Planning

A policy profile in Oracle Inventory Management represents a set of rules that define how min-max planning will calculate quantities.

Create policy profiles to define the policy parameters for min-max planning. Policy parameters refer to a set of attributes for the minimum, maximum, and Economic Order Quantity (EOQ) quantities. These attributes define how the calculation program for the inventory policies calculates the min-max quantities to maintain the inventory levels.

Policy profiles work in conjunction with the classifications that you define for min-max planning. After creating a policy profile, you assign the policy profile to a classification using the Manage Min-Max Planning Policy Profile Assignments task. A policy profile can be assigned to a classification at the organization and subinventory levels. You can define one policy profile and assign it to multiple classifications.

Minimum Quantity

Minimum quantity is the inventory level quantity below which min-max planning suggests a replenishment order to bring the inventory level back to the maximum quantity. When creating policy profiles, you must define the Default Safety Stock Days of Cover attribute on the Create Min-Max Planning Policy Profile page. Min-max planning uses the Default Safety Stock Days of Cover attribute to calculate the minimum quantity.

Maximum Quantity and EOQ

Maximum quantity is the inventory level up to which min-max planning recommends a replenishment order. When you specify the maximum quantity value, the inventory level does not exceed that value. When creating policy profiles, you must define the Maximum Quantity Calculation Method attribute on the Create Min-Max Planning Policy Profile page. Min-max planning uses the Maximum Quantity Calculation Method attribute to calculate the maximum quantity.

Additionally, you can define the EOQ attributes to calculate the EOQ and minimize the combined costs of acquiring and carrying the inventory.

Create policy profiles.

1. In the Setup and Maintenance work area, go to the following:

   • Offering: Manufacturing and Supply Chain Materials Management

   • Functional Area: Inventory Management

   • Task: Manage Min-Max Planning Policy Profiles

2. On the Manage Min-Max Planning Policy Profiles page, click the + icon.

3. On the Create Min-Max Planning Policy Profile page, do the following:

   • Enter a policy name and description.

   • Specify the required attributes in the Minimum Quantities, Maximum Quantities, and EOQ Calculation Inputs sections.

4. Click Save.