Service Parts Planning (SPP) Some Questions in Regards to Safety Stock Methods and Computations
Last updated on AUGUST 15, 2017
Applies to:Oracle Service Parts Planning - Version 12.1.3 and later
Information in this document applies to any platform.
1: What are the available options for calculating Safety Stock in SPP?
2: Users are implementing approach 1d in the solution below which is mentioned in <Note 1552207.1>
Safety Stock (SS) can be calculated in SPP based on Mean Average Deviation. In this method, SS is calculated based on the variance between previous demands and forecasts, and the service level for the item. To enable this calculation, in Item Simulation Set "Compute SS value" and in the plan parameter "Compute SS and EOQ" (EOQ is Economic Order Quantity) should be set to Yes. The SS calculation will differ based on the item attribute “Intermittent Demand” defined in the Item Simulation Set.
Users have done all the required setups in the Item Simulation Set. However, the note says "SS is calculated based on the variance" between previous demands and forecasts". Does it mean users need to have historical forecast information in the system? In their business they do not have any historical forecast. They only have historical sales history. They are generating forecast for future dates. Also, they do not have Inventory Optimization (IO) module. Please confirm if they can implement approach 4 without having IO.
3: If users change the service level in the Item Simulation Set, the safety stock calculations are not changing. Are there any other setups required for service level? They are maintaining service level in the Item Simulation Set.
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