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Inventory

This table is used within the simulation-based experiments only (i.e., Simulation, Variation, Comparison, Safety Stock Estimation, and Risk Analysis). In the Inventory table you define inventory policies for your supply chain facilities.

anyLogistix also allows you to define any custom inventory policies.

The measurement units and available currencies used throughout the scenario can be changed in the Units section of anyLogistix Settings.

Column Description

Facility

The facility for which the inventory policy is specified.

The cell contains a list of facilities (defined in the DCs and Factories table).

You can apply the same inventory policy for all facilities. In this case select here All sites, and define the inventory parameters in the succeeding columns.

Product

The product for which the inventory policy is being defined. The cell contains a list of products (defined in the Products table).

Policy Type

Defines the inventory replenishment policy. anyLogistix offers a set of standard policies:

Note that the actual quantity of the replenishment orders can be adjusted in accordance with the facility's Capacity (defined in the DCs and Factories table).

Policy Parameters

Here you specify the parameters of the inventory policy selected in the Policy Type.

The cell contains a dialog box with the inventory policy parameters.

The set of parameters depends on the chosen policy.

Initial Stock, units

Defines the initial quantity of products available in stock at the specified site.

If Unlimited inventory is chosen in the Policy Type column, the Initial Stock value is set to infinity, and the user cannot modify this value. It means that the specified Product is always available in any required quantity at this Facility.

The initial stock is applied only to the inventory records the Time Periods of which is set to the first period (in case several periods are defined in the Periods table).

Periodic Check

Applies only if Policy Type is not set to Unlimited inventory.

This option allows the user to choose whether this facility uses periodic or perpetual inventory system.

If this option is enabled, the inventory system is periodic. In this case inventory is checked not on every single product shipment / sale, but with the specified period (defined in the next column, Period). Making the inventory periodic, you can increase the system performance by reducing the amount of calculations.

Period

Applies only if the Periodic Check option is selected.

Here you specify the period of inventory check. Period is expressed in the units specified in the Time Unit column.

First Periodic Check

Applies only if the Periodic Check option is selected.

The default date is the scenario's start date.

Defines the moment in time (within the simulation period) that is used as a starting point from which the Period (of the Periodic Check) is calculated.

E.g. Assume that scenario starts on 01.01.2019 and the Period is set to 3 days. In this case the facility checks inventory every three days starting on the first simulation day (01.01.2019).
If we set First Periodic Check to 01.04.2019 and then run the experiment, the facility will check inventory every three days starting on the fourth simulation day (01.04.2019). The following periodic checks will shift accordingly.

Policy Basis

Applies only if Policy Type is not set to: Unlimited inventory, No replenishment, Order on demand, Cross Dock policy.
Defines the type of policy basis:

  • Quantity — selected by default. The inventory policy parameters specified in the Policy parameters cell define quantities of product items.
  • Days of supply historic — the inventory policy parameters specified in the Policy Parameters cell act as ratios that are multiplied by mean daily demand for this specific Facility and Product to get the actual ordered quantity.

    Mean daily demand is calculated for the number of days specified in the Stock Calculation Window column.

    E.g. The Policy Type is set to Min-max policy with its Min (s) and Max (S) parameters set to 2 and 5 respectively.
    By setting the Policy Basis to Days of supply historic and the Stock Calculation window to e.g. 10, we turn the defined fixed values of the Min and Max parameters into the following expressions:

    s = 2 * average demand for 10 days
    S = 5 * average demand for 10 days

    The parameters of any other applicable inventory policy are treated in the same way.

Stock Calculation window

Applies only if Policy Basis is set to Days of supply historic.

Defines the number of days for which the mean daily demand must be calculated (data is taken from Demand or Demand Forecast tables).

Time Unit

Specify the time unit that the Period is expressed in.

The list of available units comprises the units defined in the Manage units dialog.

Minimum Split Ratio

If a non-default value is specified in the interval between 0 and 1 (greater than 0 and less than 1), a site (DC or a factory) will allow orders to be split for partial shipping, if required.

This solution is used to prevent order delaying when there is insufficient inventory. In this case the order will be sent in parts (the minimum size of each part is defined by the value specified in this cell).

See the example for detailed explanation.

Time Period

The time period during which the inventory policy will be considered.

The cell contains a list of periods (previously defined in the Periods table).

Inclusion Type

Defines the status of the given inventory policy:

  • Include — include this inventory policy into supply chain configuration.
  • Exclude — exclude this inventory policy from supply chain configuration. If selected, the table record will be grayed out to denote the current inclusion type. The table record stays editable.

Inventory policy types

Min-max policy

Products are ordered when the inventory level falls below a fixed replenishment point (s). The ordered quantity is set to such a value that the resulting inventory quantity equals the desired maximum inventory capacity (S).
The Min-max policy is also named the (s, S) inventory policy.

If Policy Basis is set to Days of supply historic, the defined parameters values of this policy are treated as expressions.

Min-max policy parameters
  • Min — the minimum inventory level s that triggers replenishment when inventory level falls below this value.
  • Max — the desired inventory level S.
    e.g. The Min and Max parameters are set to 100 and 500 respectively. Once the inventory level falls below 100 units (e.g. down to 50 units), the DC will place a replenishment order for 450 units.

Min-max policy with safety stock

Min-max policy with safety stock — the (s, S) inventory policy with a safety stock. Products are ordered when the inventory level falls below a fixed replenishment point (s + safety stock).

The ordered quantity is set to such a value that the resulting inventory quantity equals S + safety stock.

If Policy Basis is set to Days of supply historic, the defined parameters values of this policy are treated as expressions.

Min-max with safety stock policy parameters
  • Min — the minimum inventory level s.
  • Max — the desired inventory level S.
  • Safety stock — the required safety stock

RQ policy

RQ policy — when the inventory level falls below a fixed replenishment point (R), the fixed replenishment quantity (Q) of products is ordered.

If Policy Basis is set to Days of supply historic, the defined parameters values of this policy are treated as expressions.

RQ policy parameters
  • R — the minimum inventory level that triggers replenishment order. In case of the Safety stock estimation experiment this value is considered as the safety stock.
  • Q — the required replenishment amount that is ordered once the inventory level is less than R.

Unlimited inventory

Unlimited inventory is selected by default. The policy has no parameters to define, since we assume that the products are always in stock in any required quantity.

This policy is not available in the Safety stock estimation experiment.

Order on demand

Order on demand — DC does not keep products in stock. The policy has no parameters to define. The required number of products is ordered only on receiving an order from a customer/factory or other DC.

This policy is not available in the Safety stock estimation experiment.

Material Requirements Planning

Material Requirements Planning (MRP policy) schedules inventory replenishment based on safety stock level. Once the policy detects possible safety stock violation, it estimates the required amount of products, and defines the date on which the order must be placed to timely replenish the inventory.
Here's a detailed explanation of how Material Requirements Planning works.

If Policy Basis is set to Days of supply historic, the defined parameters values of this policy are treated as expressions.

MRP policy parameters
  • Days for report creation — the period of time, during which the possible safety stock violation will be analyzed.
  • Min order quantity — the minimum amount of products that can be ordered.
  • Mult order quantity — the amount of products the Min order quantity can be increased by.
  • Max order quantity — the maximum amount of products that can be ordered.
  • Period of supply — the period of time after the possible safety stock violation, for which demand must be covered.
  • Aggregation period, days — the period of time, during which the orders will be aggregated, if required.
  • Expected lead time — difference (in days) between the replenishment and the placed orders, i.e., the delivery time, during which the products are expected to be received.
  • Safety stock quantity — the required amount of safety stock. If violated, triggers inventory replenishment.
    If it is not defined (the default 0 value is set), then:
    • The safety stock is calculated considering other MRP parameters ( Safety stock horizon, Days of safety stock)
    • The safety stock estimation experiment will not offer any result
  • Safety stock horizon — [is used in safety stock estimation if Safety stock quantity is not specified] defines the number of days that are used to calculate average safety stock.
  • Days of safety stock — [is used in safety stock estimation if Safety stock quantity is not specified] defines the number of days of average safety stock the specified Facility must have.

Regular policy

If the Regular policy is selected [the Periodic check option must be enabled], the products are ordered every specified Period.

  • This policy is not available in the Safety stock estimation experiment.
  • If Policy Basis is set to Days of supply historic, the defined parameter value of this policy is treated as expressions.
Regular policy parameters
  • Quantity — the required replenishment amount that will be ordered.

Regular policy with safety stock

If the Regular policy with safety stock is selected [the Periodic check option must be enabled], the products are ordered every specified Period considering the Safety Stock.

  • If Policy Basis is set to Days of supply historic, the defined parameters values of this policy are treated as expressions.
  • If the specified safety stock level is violated, the difference between the new value and the violated value is added to the replenishment amount. This means that Regular policy does not necessarily equal Regular policy with safety stock, whose Safety stock is set to 0.
    E.g. The Quantity parameter of the Regular policy is set to 5. The Quantity parameter of the Regular policy with safety stock is also set to 5, but its Safety stock is set to 0. If the defined safety stock is not violated, then both policies are equal, but if it is violated by e.g. 7, then the Quantity value is estimated as Safety stock - new inventory level + Quantity or 0 - (-7) + 5 = 12.
Regular policy with safety parameters
  • Quantity — the required replenishment amount.
  • Safety stock — the required safety stock.

No replenishment

No replenishment policy — a DC will not be replenishing its inventory. If certain initial stock is available, DC will be shipping products until it runs out of stock.
The policy has no parameters to define.

This policy is not available in the Safety stock estimation experiment.

Cross Dock policy

Cross Dock policy — a DC operates like a cross-docking facility. It does not have inventory, it only transfers products from one type of transport to another.

This policy is not available in the Safety stock estimation experiment.

Cross Dock policy parameters
  • Cross Dock policy — the custom pre-defined extension. No action required.
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