Minor daily fluctuations in safety stock requirements, while they may be accurate reflections of forecast demand and other factors, have no practical significance and may create extra work and confusion in production planning. Learn how to use macros to smooth out the unnecessary bumps in your safety stock calculations.
Companies keep safety stock as a reserve to call upon in times of unexpected high demand or late delivery from their suppliers. How much safety stock to keep on hand is calculated by SAP's Advanced Planning and Optimization (APO), using one of three types of methods: quantity-based methods (SB and MB), demand-based methods (SZ, SM, MZ, and MM), and statistical methods that incorporate forecast error and demand (AS, AT, BS, and BT).
The safety stock calculations standard in all releases of Advanced Planner
and Optimizer (APO) are, in most cases, sufficient to cover most business
requirements. In specific scenarios, however, these methods should be refined
to increase user satisfaction. I'll look at specific requirements for
companies that use safety days' supply definitions or one of the extended
safety stock methods for their safety stock calculations.