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<ManualTopic ID="/baanerp/cp/onlinemanual/000042" xml:lang="en">
   <Header>
      <Title>To optimize logistic parameters</Title>
      <Keyword type="header" order="d1e185614">
         <Level1>Optimizing logistic parameters</Level1>
      </Keyword>
      <Keyword type="header" order="d1e185617">
         <Level1>Logistic parameters</Level1>
         <Level2>optimizing</Level2>
      </Keyword>
      <Keyword type="header" order="d1e185622">
         <Level1>Lot size</Level1>
         <Level2>optimizing</Level2>
      </Keyword>
      <Keyword type="header" order="d1e185627">
         <Level1>Order interval</Level1>
         <Level2>optimizing</Level2>
      </Keyword>
      <Keyword type="header" order="d1e185632">
         <Level1>Economic Order Quantity</Level1>
         <Level2>optimizing</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>The <Link href="/baanerp/ti/glossary/glossary#OrderInterv_ti" role="glossary">order interval</Link> of an item
		influences the cost effectiveness of your production process.</Paragraph>
      <List>
         <ListIntro>You must find the right balance between long order-intervals
		  and short intervals:</ListIntro>
         <ListItem>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 <Link href="/baanerp/wh/glossary/glossary#000328" role="glossary">inventory carrying costs</Link>.</ListItem>
         <ListItem>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.</ListItem>
      </List>
      <Paragraph>Frequent changeovers
		have yet another disadvantage: they decrease the total production capacity.</Paragraph>
      <Paragraph>The <Link href="/baanerp/wh/glossary/glossary#000349" role="glossary">lot size</Link> has a direct relationship with the <Link href="/baanerp/ti/glossary/glossary#OrderInterv_ti" role="glossary">order interval</Link>:</Paragraph>
      <Formula space-and-orientation="indented-estimated">
         <Paragraph> Lot size = Total demand per day x Order interval </Paragraph>
      </Formula>
      <Paragraph>The computation method
		for these parameters takes the capacity constraints into account.</Paragraph>
      <GeneralSection>
         <SectionTitle>How to optimize logistic parameters</SectionTitle>
         <List>
            <ListIntro>Use the following procedure to optimize logistic
			 parameters:</ListIntro>
            <ListItem>Define the resource
			 parameters in the <GUIRef href="/baanerp/cp/rao/cprao3120m000" role="session">Resource Cost Values (cprao3120m000)</GUIRef> session.</ListItem>
            <ListItem>Optimize the logistic
			 parameters by resource with the <GUIRef href="/baanerp/cp/rao/cprao3200m000" role="session">Optimize Lot Sizing (cprao3200m000)</GUIRef> session.</ListItem>
            <ListItem>Evaluate the results
			 with the <GUIRef href="/baanerp/cp/rao/cprao3110m000" role="session">Plan Items - Optimized Lot Sizes (cprao3110m000)</GUIRef> session, and select the items
			 for which you want to transfer the optimized parameters.</ListItem>
            <ListItem>Transfer the
			 optimized parameters with the <GUIRef href="/baanerp/cp/rao/cprao3210m000" role="session">Copy Lot Sizes to Item Ordering Data (cprao3210m000)</GUIRef> session.</ListItem>
         </List>
      </GeneralSection>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000131" role="manual">Optimization algorithm for logistic parameters</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000060" role="manual">Lot sizing</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000055" role="manual">Order quantity settings</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>