Examples of Inventory Rebalancing and Replenishment Planning
This topic provides examples of inventory rebalancing and the subsequent replenishment planning for replenishment plans.
Example with No Sweep Location
In this example, the replenishment plan has a cluster with two locations, Store 1 and Store 2, and none of the locations is a sweep location.
After inventory rebalancing, these are the measure values for an item in Store 1:
|
Measure |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
Day 8 |
Day 9 |
|---|---|---|---|---|---|---|---|---|---|
|
Gross Forecast |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
Reserved Safety Stock |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
On Hand |
125 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Purchase Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Transfer Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Projected Inventory |
115 |
105 |
95 |
85 |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Initial Excess for Rebalancing |
74 |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Initial Shortage for Rebalancing |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Planned Outbound Shipments |
30 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Inbound Shipments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Projected Available Balance |
85 |
75 |
65 |
55 |
45 |
35 |
25 |
15 |
60 |
Note the following:
-
The value of the Excess Computation Window measure is 3 days.
Therefore, the Projected Inventory measure is calculated for 4 days.
-
The excess inventory for rebalancing is 74 (85 - 10 - 1).
This value is stored in the Initial Excess for Rebalancing and Excess Before Rebalancing measures.
-
A planned order for transferring 30 units from Store 1 to Store 2 is recommended on account of the inventory shortage at Store 2.
The value of the Planned Outbound Shipments measure is 30 for Day 1, which is the ship date of the planned order.
-
The value of the Excess After Rebalancing measure is 44 (74 - 30).
After inventory rebalancing, these are the measure values for the item in Store 2:
|
Measure |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
Day 8 |
Day 9 |
|---|---|---|---|---|---|---|---|---|---|
|
Gross Forecast |
30 |
30 |
30 |
18 |
30 |
30 |
30 |
18 |
18 |
|
Reserved Safety Stock |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
On Hand |
30 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Purchase Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Transfer Orders |
0 |
0 |
80 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Projected Inventory |
0 |
-30 |
20 |
2 |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Initial Excess for Rebalancing |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Initial Shortage for Rebalancing |
30 |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Planned Outbound Shipments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Inbound Shipments |
0 |
30 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Projected Available Balance |
0 |
0 |
50 |
12 |
-18 |
-48 |
-78 |
-96 |
-114 |
Note the following:
-
The value of the Excess Computation Window measure is 3 days.
Therefore, the Projected Inventory measure is calculated for 4 days.
-
The excess inventory is -9 (2 - 10 - 1), and there's no excess for rebalancing.
-
The value of the Shortage Computation Window measure is 1 day.
Therefore, the inventory shortage is calculated for 2 days.
-
The Include safety stock in shortage calculation check box isn't selected on the Inventory Rebalancing tab on the Plan Options page for the replenishment plan. Therefore, the inventory shortage for rebalancing is 30.
This value is stored in the Initial Shortage for Rebalancing and Shortage Before Rebalancing measures.
-
A planned order for transferring 30 units from Store 1 to Store 2 is recommended on account of the inventory shortage at Store 2.
The value of the Planned Inbound Shipments measure is 30 for Day 2, which is the due date of the planned order.
-
The value of the Shortage After Rebalancing measure is 0 (30 - 30).
After replenishment planning, these are the measure values for the item in Store 1:
|
Measure |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
Day 8 |
Day 9 |
|---|---|---|---|---|---|---|---|---|---|
|
Gross Forecast |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
Net Forecast |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
Sales Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Total Demand |
40 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
On Hand |
125 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Purchase Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Transfer Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Outbound Shipments |
30 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Inbound Shipments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Total Supply |
125 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
55 |
|
On Order |
0 |
0 |
0 |
0 |
0 |
55 |
55 |
55 |
0 |
|
Projected Available Balance |
85 |
75 |
65 |
55 |
45 |
35 |
25 |
15 |
60 |
|
Beginning Inventory Position |
85 |
75 |
65 |
55 |
45 |
90 |
80 |
70 |
60 |
|
Planned Replenishments by Order Date |
0 |
0 |
0 |
0 |
55 |
0 |
0 |
0 |
0 |
|
Planned Replenishments by Due Date |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
55 |
|
Final Inventory Position |
85 |
75 |
65 |
55 |
100 |
90 |
80 |
70 |
60 |
|
Adjusted Minimum Quantity |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Final Minimum Quantity |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
Adjusted Maximum Quantity |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Final Maximum Quantity |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
Note the following:
-
On Day 1, the Total Demand measure sums up the Net Forecast and Planned Outbound Shipments measures and is 40 (10 + 30).
-
There's no change to the computation logic for replenishment orders.
After replenishment planning, these are the measure values for the item in Store 2:
|
Measure |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
Day 8 |
Day 9 |
|---|---|---|---|---|---|---|---|---|---|
|
Gross Forecast |
30 |
30 |
30 |
18 |
30 |
30 |
30 |
18 |
18 |
|
Net Forecast |
30 |
30 |
30 |
18 |
30 |
30 |
30 |
18 |
18 |
|
Sales Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Total Demand |
30 |
30 |
30 |
18 |
30 |
30 |
30 |
18 |
18 |
|
On Hand |
30 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Purchase Orders |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Transfer Orders |
0 |
0 |
80 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Outbound Shipments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Inbound Shipments |
0 |
30 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Total Supply |
30 |
30 |
80 |
0 |
160 |
0 |
0 |
0 |
0 |
|
On Order |
110 |
80 |
160 |
160 |
0 |
0 |
0 |
0 |
156 |
|
Projected Available Balance |
0 |
0 |
50 |
32 |
162 |
132 |
102 |
84 |
66 |
|
Beginning Inventory Position |
110 |
80 |
210 |
192 |
162 |
132 |
102 |
84 |
222 |
|
Planned Replenishments by Order Date |
0 |
160 |
0 |
0 |
0 |
0 |
0 |
156 |
0 |
|
Planned Replenishments by Due Date |
0 |
0 |
0 |
0 |
160 |
0 |
0 |
0 |
0 |
|
Final Inventory Position |
110 |
240 |
210 |
192 |
162 |
132 |
102 |
240 |
222 |
|
Adjusted Minimum Quantity |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Final Minimum Quantity |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
|
Adjusted Maximum Quantity |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Final Maximum Quantity |
240 |
240 |
240 |
240 |
240 |
240 |
240 |
240 |
240 |
Note the following:
-
On Day 2, the Total Supply measure includes the Planned Inbound Shipments measure and is 30.
-
On Day 1, the On Order measure includes the planned inbound shipment of 30 units that's arriving on Day 2.
-
There's no change to the computation logic for replenishment orders.
Example with a Sweep Location
In this example, the replenishment plan has two clusters, Cluster 1 and Cluster 1.
Cluster 1 has the M1 and M2 locations, and M1 is a sweep location. M1 has excess inventory of 34 units of an item, and M2 has an inventory shortage of 30 units of the item.
After inventory rebalancing for Cluster 1, these measure values for the item in M1 are calculated:
|
Measure |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
Day 8 |
Day 9 |
|---|---|---|---|---|---|---|---|---|---|
|
Gross Forecast |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
On Hand |
85 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Transfer Orders |
0 |
40 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Projected Inventory |
75 |
105 |
95 |
85 |
75 |
65 |
55 |
45 |
Not applicable |
|
Initial Excess for Rebalancing |
34 |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Initial Shortage for Rebalancing |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Planned Outbound Shipments |
30 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Inbound Shipments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Reserved Safety Stock |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
Note the following:
-
The value of the Excess Computation Window measure is 7 days.
Therefore, the Projected Inventory measure is calculated for 8 days.
-
The value of the Initial Excess for Rebalancing measure is 34 (45 - 10 - 1).
-
A planned order is created for transferring 30 units from M1 to M2.
-
The value of the Excess After Rebalancing measure is calculated as follows: Excess Before Rebalancing (34) - Planned Outbound Shipments (30) = 4
-
The value of the Shortage After Rebalancing measure for the item at M2 is calculated as follows: Shortage Before Rebalancing (30) - Planned Inbound Shipments (30) = 0
Cluster 2 has the M1 and S1 locations. M1 has excess inventory of 4 units of the item, and S1 has an inventory shortage of 4 units of the item.
When inventory rebalancing is done for Cluster 2, the value of the Excess After Rebalancing measure for the item at M1 in Cluster 1 is taken as the value of the Excess Before Rebalancing measure for the item at M1 in Cluster 2.
After inventory rebalancing for Cluster 2, these measure values for the item in M1 are displayed on the Rebalancing Analysis page:
|
Measure |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
Day 8 |
Day 9 |
|---|---|---|---|---|---|---|---|---|---|
|
Gross Forecast |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
|
On Hand |
85 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Transfer Orders |
0 |
40 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Projected Inventory |
75 |
105 |
95 |
85 |
75 |
65 |
55 |
45 |
Not applicable |
|
Initial Excess for Rebalancing |
34 |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Initial Shortage for Rebalancing |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
Not applicable |
|
Planned Outbound Shipments |
34 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Planned Inbound Shipments |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Reserved Safety Stock |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
10 |
Note the following:
-
The value of the Excess Computation Window measure is 7 days.
Therefore, the Projected Inventory measure is calculated for 8 days.
-
A planned order is created for transferring 4 units from M1 to S1.
-
The value of the Initial Excess for Rebalancing measure is 34 (45 - 10 - 1).
-
The value of the Planned Outbound Shipments measure is the sum for Cluster 1 and Cluster 2 and is 34 (30 + 4).
You can see these measure values for the item on the Rebalancing Details by Item Location page:
|
Cluster |
Location |
Excess Before Rebalancing |
Excess After Rebalancing |
Shortage Before Rebalancing |
Shortage After Rebalancing |
Planned Inbound Shipments |
Planned Outbound Shipments |
|---|---|---|---|---|---|---|---|
|
Cluster 1 |
M1 |
34 |
4 |
0 |
0 |
0 |
30 |
|
Cluster 1 |
M2 |
0 |
0 |
30 |
0 |
30 |
0 |
|
Cluster 2 |
M1 |
4 |
0 |
0 |
0 |
0 |
4 |
|
Cluster 2 |
S1 |
0 |
0 |
4 |
0 |
4 |
0 |