Example of Project-Specific Safety Stock Planning with Days of Cover
You can use days of cover calculations while determining the safety stock used in planning for unexpected changes in project demands. Let's use an example to understand how days of cover are calculated.
Scenario
How Days of Cover Are Calculated
Let's say you're working on a project-based plan with these netting rule specifications:
-
Reservation level is Project Group
-
Netting sequence order:
-
Net project task supply
-
Net excess project supple
-
Net common supply
-
| Sequence Number | Demand Attribute | Demand Operator | Supply Attribute | Supply Operator |
| 1 | Project Group | Any | Project Group | Matches Demand Value |
| Project | Any | Project | Matches Demand Value | |
| Task | Any | Task | Matches Demand Value | |
| 2 | Project Group | Any | Project Group | Matches Demand Value |
| Project | Any | Project | Matches Demand Value | |
| Task | Any | Task | Any | |
| 3 | Project Group | Any | Project Group | Matches Demand Value |
| Project | Any | Project | Any | |
| Task | Any | Task | Any | |
| 4 | Project Group | Any | Project Group | Blank |
| Project | Any | Project | Blank | |
| Task | Any | Task | Blank |
Let's also assume these are your item attributes:
-
Safety stock planning method is Days of Cover
-
Days of Cover Demand period is 5 days
-
Days of Cover period is 2 days
This table lists out the daily number of demand units for each task.
|
Project |
Task |
Day 1 (Common Demand = 30 units) |
Day 2 (Common Demand = 30 units) |
Day 3 (Common Demand = 30 units) |
Day 4 (Common Demand = 30 units) |
Day 5 (Common Demand = 30 units) |
Day 6 (Common Demand = 30 units) |
Day 7 (Common Demand = 30 units) |
|---|---|---|---|---|---|---|---|---|
|
P1 |
T1 |
10 |
- |
20 |
20 |
- |
20 |
20 |
|
P1 |
T2 |
10 |
10 |
25 |
25 |
- |
25 |
25 |
|
P2 |
T1 |
- |
- |
- |
10 |
10 |
- |
10 |
Here's how the total demand, average daily demand and safety stock days of cover duration are calculated:
-
The total demand is the sum of the common demand and the demand for each project and task combination. For Day 1, the total demand is 30+10+10=50 units.
-
The average daily demand is the sum of total daily demands from the day in question divided by the days of cover demand period. For Day 1, it's (50+40+75+85+85)/5 = 67 units.
-
The safety stock days of cover is the product of the average daily demand and the days of cover. For Day 1, it's 67*2 = 134 days.
|
Day |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
|---|---|---|---|---|---|---|---|
|
Total Demand |
50 |
40 |
75 |
85 |
85 |
85 |
85 |
|
Average Daily Demand |
67 |
74 |
83 |
68 |
51 |
34 |
17 |
|
Days of Cover |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
|
Safety Stock Days of Cover |
134 |
148 |
166 |
136 |
102 |
68 |
34 |
How Plans Maintain the Safety Stock Calculated Using Days of Cover
Let's now use the safety stock days of cover calculation to understand how supply plans maintain the safety stock by assessing available on-hand supply and safety stock to determine a projected available balance. When the number of projected available balance units is less than the number of safety stock units, the creation of more supply units is recommended to make up the difference.
-
The project-based plan calculates days of cover safety stock levels at common for common and project demands.
-
Common on-hand units are used to net common demands and project demands based on the attribute-based netting sequence steps.
-
Common on-hand units also satisfy the common safety stock levels throughout the planning horizon.
|
Project |
Task |
Day 1 (Common Demand = 30 units) |
Day 2 (Common Demand = 30 units) |
Day 3 (Common Demand = 30 units) |
Day 4 (Common Demand = 30 units) |
Day 5 (Common Demand = 30 units) |
Day 6 (Common Demand = 30 units) |
Day 7 (Common Demand = 30 units) |
|---|---|---|---|---|---|---|---|---|
|
P1 |
T1 |
10 |
- |
20 |
20 |
20 |
20 |
20 |
|
P1 |
T2 |
10 |
10 |
25 |
25 |
25 |
25 |
25 |
|
P2 |
T1 |
- |
- |
- |
10 |
10 |
10 |
10 |
|
Demand Type |
Day 1 |
Day 2 |
Day 3 |
Day 4 |
Day 5 |
Day 6 |
Day 7 |
|---|---|---|---|---|---|---|---|
|
Safety Stock |
134 |
148 |
166 |
136 |
102 |
68 |
34 |
|
On-Hand Common Supply |
250 (Common demand on each day plus the demand for all project and tasks on Day 6) |
- |
- |
- |
- |
- |
- |
|
Available On-Hand Common Supply |
220 |
190 |
160 |
130 |
100 |
30 |
0 |
|
Projected Common Available Balance |
220 |
190 |
166 |
136 |
106 |
68 |
38 |
|
On-Hand Supply for PG1-P1-T1 |
100 |
- |
- |
- |
- |
- |
- |
|
PO Supply for PG1-P1-T2 |
85 |
- |
- |
- |
- |
- |
- |
|
Planned Order Supply for PG1-P1-T1 |
- |
- |
- |
- |
- |
- |
55 |
|
Planned Order Supply |
- |
- |
6 |
- |
- |
32 |
- |
The common on-hand 250 units satisfies the common demand from Day 1 to Day 7. Additionally, the plan maintains sufficient supply to satisfy common safety stock levels calculated based on days of cover. On Day 3, a common supply of 6 units is recommended by the plan to maintain sufficient stock for the common safety stock level calculated using days of cover. On Day 6, the plan nets 40 units of the common on-hand units to project demands based on project- netting sequences. On Day 6, because the common stock isn't sufficient to maintain safety stock level, the plan recommends 32 units of common supply. On Day 7, the planned order supply of 55 units with the project and task is recommended by the plan based on the attributes selected for Demand Grouping in Attributes for Planned Orders of the attribute-based netting rules.