| # 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. Related topics Optimization algorithm for logistic parameters Lot sizing Order quantity settings |