Documentation for Streamline 4.x
User Guide
1. General Information
2. Starting Up
3. Connecting data
4. Demand and Sales Forecasting
5. Inventory Planning
6. Reference
Documentation for Streamline 4.x
1. General Information
2. Starting Up
3. Connecting data
4. Demand and Sales Forecasting
5. Inventory Planning
6. Reference
Explain inventory calculation dialog is designed to show and explain Streamline’s planning process for each planning item. This dialog discovers the simulation modeling behind a purchase, transfer, material requirements, and production plans generated by Streamline. It is especially useful to help understand the planning logic in the following complex cases as:
First of all, we give a description of this dialog, and then show how it can be of help in particular situations using built-in examples.
To open the Explain inventory calculation dialog:
The Explain inventory calculation dialog appears (see figure below).
This dialog is divided into two parts. The top part shows the properties of the currently selected planning item. The bottom part, a table displaying events that will happen to the item in the future based on the input data (actual events) and Streamline's simulation modeling (simulated events).
The dialog has its own color-coding helping you understand the math behind the projected inventory levels.
Icon | Event |
---|---|
Placement of a transfer, purchase, or manufacturing order recommended by Streamline (simulation). | |
Arrival of the order planned by Streamline (simulation). | |
Arrival of actual purchase or transfer order. You can view this order in the To receive tab of the In transition details dialog. | |
Shipment of a sales order. You can view this order in the To ship tab of the In transition details dialog. | |
Item write-off (simulation). | |
End of the data aggregation period. |
Buttons with Up and Down arrows on the right of the dialog allow navigating through the planning items.
Manufacture details option expands the table with all the items of the lower echelon which are linked to the current planning item based on the BOMs and shows the manufacture forecast for them.
The color-coding legend for the table is shown in the figure below.
There are three color backgrounds for cells:
The primary purpose of the Explain inventory calculation dialog is to explain how the Purchase plan and the Projected inventory levels are calculated. In this section, we will show how to use this dialog to get these plans for the following built-in examples:
To show the capabilities of the dialog, we have slightly changed the input data of the project:
The last modification allows Explain inventory calculation dialog to show safety stocks for each order cycle.
Now, let's figure out, how the first planned order of 96 units is calculated - see the first cell of the Planned orders row in the figure below.
To determine the quantity to order currently (current date is Dec 1, 2018 in the example), Streamline uses the same formula as shown in the Understanding purchase plan and projected inventory levels article:
Current order = MAX(CEILING(MAX(0, D_{OC} + Safety stock + Qty_to_ship_{LT,OC} - Remaining), Rounding), Min lot), (1)
Remaining = MAX(0, MAX(0, On hand) + Qty_to_receive_{LT,OC} - D_{LT}).
Where:
As Lead time = 10 days that ends up on Dec 12, 2018 and the Order cycle is 1 month, we take the Subperiod consumption demand starting from the end of Dec 12, 2018 to the end of Jan 12, 2019. Since the dialog shows the dates the particular subperiod ends, we take the sum for the four subperiods staring from Dec 31, 2018.
D_{LT} = Demand_forecast_for_period * Lead time, days / 30 = 197 * 10 / 30 = 66. This value is shown in the Subperiod consumption row on the date when the first Streamline's planned order arrives.
As we have a shipment of 30 units that hit this interval (see figure above), Qty to ship = 30.
Now, let's replace the parameters with the values:
Current order = MAX(CEILING(MAX(0, 162 + 94 + 30 - 200), 12), 60) = 96,
Remaining = MAX(0, MAX(0, 266) + 0 - 66) = 200.
We highlighted the values that are used in the calculation of the Current order quantity with positive and negative signs via green and red borders correspondingly in the figure above.
To find out how the future on-hand levels at the end of each period are calculated, we will use two rows of the dialog table, Inventory + in transition and Planned order arrivals.
If you set the cursor at any cell of the Inventory + in transition row, you'll see the cells taking part in the calculation of the value. This row calculates the remaining on-hand at the end of each subperiod based on the:
In other words, this row shows the on-hand remaining at the end of each subperiod, however, except for the subperiods when Streamline's planned order arrivals happen. For those subperiods, it specifies the on-hand remaining not taking into account the arrival amount. These arrivals are shown in the Planned order arrivals row. The resulting projected inventory levels, which is the sum of the Inventory + in transition and Planned order arrivals rows, are indicated in the Projected inventory row. Consequently, the amounts at the end of each data aggregation period in this row make up the Projected inventory levels report (see figure below).
In the first section of this example, we showed how Streamline calculates the Current order quantity. In this section, we explain how all the other order recommendations in the purchase plan are determined.
To calculate the subsequent order amounts, Streamline uses almost the same formula as formula (1):
Subsequent order_{i} = MAX(CEILING(MAX(0, D(OC_{i})
+ Safety stock_{i}
+ Qty_to_ship(OC_{i})
- Qty_to_receive(OC_{i})
- Remaining_{i-1}
), Rounding), Min lot), i = 2,…
(2)
where:
i
– the serial number of the order cycle period for which the quantity to order is calculated;D(OC_{i})
– the demand during the i
-th order cycle period;Safety stock_{i}
– the calculated safety stock for the i
-th order cycle period;Qty_to_ship(OC_{i})
– the anount of inventory that a to be shipped within the i
-th order cycle period;Qty_to_receive(OC_{i})
– the anount of inventory that a to be received within the i
-th order cycle period;Remaining_{i-1}
– the remainig on-hand at the end of the previous (i - 1
) order cycle period.
The values for all of these parameters can be directly found in the dialog table. The most interesting of them is the Remaining_{i-1}
, i = 2,…
. As we said in the description of the dialog, the purpose of the Inventory + in transition is to calculate these remainings. The figure below highlights the values of the parameters that are used to get the amount for the second order.
We have intentionally set Streamline to determine safety stock as the demand for the given number of future periods (1 month in our example) to be able to show you how the order amount is calculated.
D(OC_{2})
= 11 + 52 + 3 + 27 = 93;Safety stock_{2}
= Safety stock_{1}
- 9 = 94 - 9 = 85;Now, let's replace the parameters with the values:
Subsequent order_{2} = MAX(CEILING(MAX(0, 93 + 85 - 30 - 104), 12), 60) = MAX(CEILING(44, 12), 60) = 60.
To calculate the ordered quantities correctly in these more generic cases, the formulas (1) and (2) should account for the values from the mentioned rows.