Inventory

This table is used within the simulation-based experiments only (i.e. Simulation, VariationComparison, Safety Stock Estimation, and Risk Analysis). In the Inventory table you define inventory policies for your supply chain facilities. 

ALX also allows you to define any custom inventory policies.

The measurement units and available currencies used throughout the scenario can be changed in the Units section of ALX Preferences.

Column

Description

Facility

The facility for which the inventory policy is specified. 

Double-click the cell to select the facility from the list (the list is taken from the DCs and Factories table).

You can apply the same inventory policy for all facilities. In this case select here All sites, and define the inventory parameters in the succeeding columns. 

Product

The product for which the inventory policy is being defined. Double-click in the cell and choose the required product from the list (it lists all products defined in the Products table).

Policy Type

Defines the policy type:

  • Min-max policy - also named (s, S) inventory policy. Products are ordered when the inventory level falls below a fixed replenishment point (s). The ordered quantity is set to such a value that the resulting inventory quantity equals S.
  • Min-max policy with safety stock - the (s, S) inventory policy with safety stock. Products are ordered when the inventory level falls below a fixed replenishment point (s + safety stock). The ordered quantity is set to such a value that the resulting inventory quantity equals S + safety stock.
  • RQ policy - (R, Q) inventory policy. Fixed replenishment point / fixed replenishment quantity policy. When the inventory level falls below a fixed replenishment point (R), the fixed replenishment quantity (Q) of products is ordered.
  • Unlimited inventory - selected by default. Selecting Unlimited inventory policy, we assume that the products are always in stock in any required quantity.
  • Order on demand - DC does not keep products in stock. The required number of products is ordered only on receiving an order from a customer/factory or other DC.
  • Material Requirements Planning - schedules inventory replenishment based on safety stock level. Once the policy detects possible safety stock violation (calculated via the Demand Forecast table data and the specified Safety stock quantity), it estimates the amount of products required for the specified Period of supply (including the already lacking products due to the safety stock violation), and considers the Expected lead time parameter to define the accurate replenishment date. If the resulting date is not "today", the replenishment order will not be placed. The next day the policy will evaluate the possible safety stock violation again.
    Note: If you specify Aggregation period, days other than zero, the replenishment order will be placed "today" if at least one safety stock violation is forecasted within the specified period.
  • Regular policy - [Periodic check option must be enabled] Products are ordered every specified Period.
  • Regular policy with safety stock - [Periodic check option must be enabled] Products are ordered every specified Period considering the Safety Stock.
  • No replenishment - DC will not be replenishing its inventory. If certain initial stock is available, DC will be shipping products until it runs out of stock.
  • XDock policy - DC operated like a cross-docking facility. It does not have inventory, it only transfers products from one type of transport to another.

Note that the actual quantity of the replenishment orders can be adjusted in accordance with the facility's Capacity (defined in the DCs and Factories table).

ALX also allows you to define any custom inventory policies. If such polices are defined, they will appear at the bottom of the list.

Policy Parameters

Here you specify the parameters of the inventory policy selected in the Policy Type.

Double-click in the cell and provide the inventory policy parameter values in the appeared dialog box.

The set of parameters depends on the chosen Policy Type. It prompts you to specify:

  • Min, Max - if the Min-max policy is selected.
  • Min, Max, safety stock - if the Min-max policy with safety stock is selected.
  • R, Q - if the RQ is selected.
  • Unlimited - if the Unlimited inventory is selected.
  • Order on demand - [not editable] if Order on demand is selected.
  • MRP Inventory policy - (opens a dialog box with a set of parameters) if the Material Requirements Planning policy is selected:
    • Days for report creation - the period of time, during which the possible safety stock violation will be analyzed.
    • Min order quantity - the minimum amount of products that can be ordered.
    • Mult order quantity - the amount of products the Min order quantity can be increased by. 
    • Max order quantity - the maximum amount of products that can be ordered.
    • Agregation period, days - the period of time, during which the orders will be aggregated, if required.
    • Expected lead time - difference (in days) between the replenishment and the placed orders, i.e. the delivery time, during which the products are expected to be received.
    • Safety stock quantity - [overrides Safety stock horizon] the amount of safety stock, which triggers inventory replenishment if violated.
    • Safety stock horizon - [it is calculated automatically if Safety stock quantity is not specified] defines the number of days that is used to calculate average safety stock.
    • Days of safety stock - defines the number of days of average safety stock the specified Facility must have.
    • Period of supply - the period of time after the possible safety stock violation, for which demand must be covered.
  • Quantity - if the Regular policy is selected.
  • Quantity, Safety stock - If the Regular policy with safety stock policy is selected
  • No parameters - if the No replenishment policy is selected.
  • XDock policy - if XDock policy is selected.

Initial Stock, units

Defines the initial quantity of products available in stock at the specified site. 

If Unlimited inventory is chosen in the Policy Type column, the Initial Stock value is set to infinity, and the user cannot modify this value. It means that the specified Product is always available in any required quantity at this Facility.

Periodic Check

Applies only if Policy Type is not set to Unlimited inventory.

This option allows the user to choose whether this facility uses periodic or perpetual inventory system.

If this option is selected, the inventory system is periodic. In this case inventory is checked not on every single product shipment / sale, but with the specified period (defined in the next column, Period, days). Making the inventory periodic, you can increase the system performance by reducing the amount of calculations.

Period

Applies only if the Periodic Check option is selected.

Here you specify the period of inventory check. Period is expressed in the units specified in the Time Unit column. 

Policy Basis

Applies only if Policy Type is not set to Unlimited inventory.

Defines the type of policy basis:
  • Quantity - selected by default. The inventory policy parameters (s,S), or (R,Q) specified in the Policy parameters cell define quantities of product items.
  • Days of supply historic - the inventory policy parameters specified in the Policy Parameters cell do not represent actual quantities of product items. They act as ratios that are multiplied by mean daily demand for this specific Facility and Product to get the actual ordered quantity. Mean daily demand is calculated based on the entries in the Demand table. All the entries for the specified number of last days (this number is defined in the Stock Calculation Window cell) are considered.

Stock Calculation window

Applies only if Policy Basis is set to Days of supply historic .

Defines the number of days that are used to calculate the mean daily demand (taken from Demand or Demand Forecast).

Time Unit

Specify the time unit that the Period is expressed in.

Note: The list of available units comprises the units defined in the ALX Preferences.

Time Period

The time period during which the inventory policy will be considered.

Double-click the corresponding row cell to choose among the available periods (previously defined in the Periods table).

Inclusion Type

Defines the status of the given inventory policy:

  • Include - include this inventory policy into supply chain configuration.
  • Exclude - exclude this inventory policy from supply chain configuration. If selected, the table record will be grayed out to denote the current inclusion type. The table record stays editable.
    Note: If you feel that your scenario contains too many objects marked as "Excluded" and you know that you no longer use them, you can instantly remove all such objects.


 

Related topics

Expanding table records

Edit extensions