Example: to calculate the optimized order parameters

Calculating the optimized order parameters is one of the steps that LN performs in the optimization algorithm for logistic parameters in the Resource Analysis and Optimization module in Enterprise Planning. The optimized order parameters consist of the optimized order interval (in days) and the optimized lot size.

Optimized order interval

The formula that LN uses to calculate the optimized order interval is the following:

OI = L/F

Where:

OI	Order interval (days)
L	Optimized time period (days)
F	Number of times an item is produced in the optimized time period

Example

Suppose that we have the following data:

L:	60 days
F:	20

The calculation of the optimized order interval is then:

OI = L/F = 60/20 = 3

This means that the optimized order interval is 3 days.

Optimized lot size

The formula that LN uses to calculate the optimized lot size is the following:

LS = D/F

Where:

LS	Lot size
D	Total demand in the optimized period
F	Number of times an item is produced in the optimized period

Example

Suppose that we have the following data:

D:	600 pieces
F:	20

The calculation of the optimized lot size is then:

LS = D/F = 600/20 = 30

This means that the optimized lot size is 30 pieces