To optimize logistic parameters
The order interval of an item
influences the cost effectiveness of your production process.
You must find the right balance between long order-intervals
and short intervals:
- If order intervals are
long, the average inventory levels are relatively high in order to meet the
demand between two subsequent production orders. This causes high inventory carrying costs.
- If order intervals are
short, many changeovers occur between items that are produced with the same
resource. A lot of valuable resource time is spent as setup time. As a result,
the average production cost rises.
Frequent changeovers
have yet another disadvantage: they decrease the total production capacity.
The lot size has a direct relationship with the order interval:
Lot size = Total demand per day x Order interval
The computation method
for these parameters takes the capacity constraints into account.
How to optimize logistic parameters
Use the following procedure to optimize logistic
parameters:
- Define the resource
parameters in the Resource Cost Values (cprao3120m000) session.
- Optimize the logistic
parameters by resource with the Optimize Lot Sizing (cprao3200m000) session.
- Evaluate the results
with the Plan Items - Optimized Lot Sizes (cprao3110m000) session, and select the items
for which you want to transfer the optimized parameters.
- Transfer the
optimized parameters with the Copy Lot Sizes to Item Ordering Data (cprao3210m000) session.