<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/cp/onlinemanual/000480" xml:lang="en">
   <Header>
      <Title>Planning based on number of days supply</Title>
      <Keyword type="header" order="d1e184091">
         <Level1>Minimum and maximum inventory level</Level1>
         <Level2>VMI</Level2>
      </Keyword>
      <Keyword type="header" order="d1e184096">
         <Level1>VMI</Level1>
         <Level2>Minimum and maximum inventory level</Level2>
      </Keyword>
      <Keyword type="header" order="d1e184101">
         <Level1>Planning</Level1>
         <Level2>Minimum and maximum inventory level</Level2>
      </Keyword>
   </Header>
   <AimSection>
      <Paragraph>This topic describes how a supplier in a <Link href="/baanerp/wh/glossary/glossary#000469" role="glossary">vendor managed inventory (VMI)</Link> setup can perform supply planning based on the
		number of days of supply that the customer should have in inventory.</Paragraph>
   </AimSection>
   <GeneralSection>
      <SectionTitle>Goal of the planning method</SectionTitle>
      <Paragraph>This planning method is a variant of the <Link href="/baanerp/cp/onlinemanual/000476" role="manual">To work with minimum and maximum inventory</Link> planning method.</Paragraph>
      <Paragraph>The goal of this planning method is to keep the
		customer's inventory at a sufficient level to safeguard the customer's
		continuing operation in case of temporary supply problems. The inventory level
		must be such, that, if all supply would suddenly stop, the customer would have
		sufficient inventory to continue operations for a particular number of days
		before the customer runs out of stock.</Paragraph>
      <Paragraph>Meanwhile, this method reduces the risk that
		inventory becomes obsolete, because the delivered quantity will no more than
		needed.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Relevant parameters</SectionTitle>
      <List>
         <ListIntro>The following fields on the <GUIRef href="/baanerp/tc/trm/tctrm1620m000" role="session">Terms and Conditions Line (tctrm1620m000)</GUIRef> session's <GUIRef href="/baanerp/tc/trm/tctrm2151m000#tctrm110.plng" role="groupbox">Planning</GUIRef> tab
		  determine how this method is applied.</ListIntro>
         <ListItem> 
            <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.umml" role="formfield">Use Min-Max Inventory Levels</Link>
         </ListItem>
         <ListItem> 
            <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mmsp" role="formfield">Min-Max Specification</Link>
         </ListItem>
         <ListItem> 
            <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mmnd" role="formfield">Min-Max Number of Days</Link>
         </ListItem>
         <ListItem> 
            <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mnfc" role="formfield">Minimum Factor</Link>
         </ListItem>
         <ListItem> 
            <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mxfc" role="formfield">Maximum Factor</Link>
         </ListItem>
      </List>
      <Paragraph>To use the planning method described in this
		topic, set the <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mmsp" role="manual">Min-Max Specification</GUIRef> field to <GUIRef href="/baanerp/tc/domains/imms#nr.of.days" role="option">Number of Days</GUIRef>.</Paragraph>
      <Note>
         <SectionTitle> Note</SectionTitle>
         <Paragraph>If you set the <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mmsp" role="manual">Min-Max Specification</GUIRef> field to <GUIRef href="/baanerp/tc/domains/imms#nr.of.days" role="option">Number of Days</GUIRef>, you cannot select the <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.cnsp" role="formfield">Confirm Supply</Link> check box or the <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.ucsp" role="formfield">Use Confirmed Supply</Link> check box anymore and the <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.rpbo" role="formfield">Replenishment Based On</Link> field is automatically set to
		  the fixed value of <GUIRef href="/baanerp/tc/domains/rpbo#inventory.level" role="option">Inventory Level</GUIRef>.</Paragraph>
      </Note>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Minimum levels, maximum levels, or both</SectionTitle>
      <Paragraph>To use this method to plan the supply to the
		customer, set the <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.umml" role="manual">Use Min-Max Inventory Levels</GUIRef> field to <GUIRef href="/baanerp/tc/domains/umml#minimum.levels" role="option">Minimum Levels</GUIRef>, <GUIRef href="/baanerp/tc/domains/umml#maximum.levels" role="option">Maximum Levels</GUIRef>, or <GUIRef href="/baanerp/tc/domains/umml#min.and.max" role="option">Minimum and Maximum Levels</GUIRef>.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Minimum factor and maximum factor</SectionTitle>
      <Paragraph>In this planning method, you can determine the
		lower and upper bounds between which the inventory can fluctuate.</Paragraph>
      <ExampleSection>
         <SectionTitle> Example</SectionTitle>
         <List>
            <ListIntro>Suppose, you have set the following parameters:</ListIntro>
            <ListItem> 
               <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mmnd" role="manual">Min-Max Number of Days</GUIRef> = 10 days</ListItem>
            <ListItem> 
               <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.umml" role="manual">Use Min-Max Inventory Levels</GUIRef> = <GUIRef href="/baanerp/tc/domains/umml#min.and.max" role="option">Minimum and Maximum Levels</GUIRef>
            </ListItem>
            <ListItem> 
               <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mnfc" role="manual">Minimum Factor</GUIRef> = 0.9</ListItem>
            <ListItem> 
               <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mxfc" role="manual">Maximum Factor</GUIRef> = 1.5</ListItem>
         </List>
         <Paragraph>Then, this planning method aims to keep the
		  customer's inventory sufficient for at least 9 days (0.9 * 10) and at most 15
		  days (1.5 * 10)</Paragraph>
      </ExampleSection>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Calculation</SectionTitle>
      <Paragraph>When the customer approves a forecast <Link href="/baanerp/cp/glossary/glossary#000457" role="glossary">revision</Link>, the maximum and minimum levels are frozen for
		that revision.</Paragraph>
      <ProcedureList>
         <ListIntro>For each <Link href="/baanerp/cp/glossary/glossary#000463" role="glossary">forecast period</Link>, ERP Enterprise performs the following steps:</ListIntro>
         <ListItem> ERP Enterprise adds the value of the <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mmnd" role="manual">Min-Max Number of Days</GUIRef> field to the start of the
		  concerned forecast period. This addition produces the horizon date.</ListItem>
         <ListItem>
            <Paragraph> ERP Enterprise calculates the sum of the <Link href="/baanerp/cp/glossary/glossary#000456" role="glossary">forecast</Link> for every forecast period between the start of
			 the designated forecast period and the horizon date.</Paragraph>
            <Paragraph>If the horizon date falls in the middle of a
			 forecast period, ERP Enterprise uses a proportional part of the forecast of that forecast period.</Paragraph>
            <Paragraph>Only the forecast periods' start dates are
			 recorded. A forecast period's finish date is derived from the next forecast
			 period's start date. Therefore, the length of the ultimate forecast period is
			 unspecified. For the purpose of this calculation, ERP Enterprise assumes that the
			 length of the ultimate forecast period equals the preceding forecast period.</Paragraph>
         </ListItem>
         <ListItem>The effective <Emphasis>minimum</Emphasis> inventory for the
		  relevant forecast period is the calculated sum of the forecast values
		  multiplied by the value of the <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mnfc" role="manual">Minimum Factor</GUIRef>.</ListItem>
         <ListItem>The effective <Emphasis>maximum</Emphasis> inventory for the
		  relevant forecast period is the sum of the forecast values multiplied by the
		  value of the <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mxfc" role="manual">Maximum Factor</GUIRef>.</ListItem>
      </ProcedureList>
      <Note>
         <SectionTitle> Note</SectionTitle>
         <Paragraph>The number of days is expressed in calendar
		  days, not in working days. The calculation does not take a working calendar
		  into account. Therefore, the procedure also calculates minimum and maximum
		  inventory levels for not workable days.</Paragraph>
      </Note>
   </GeneralSection>
   <ExampleSection>
      <SectionTitle> Example</SectionTitle>
      <Paragraph>In this example, the following values apply.</Paragraph>
      <TABLE width="80%" border="1" cellpadding="1" cellspacing="1" borderstyle="default"
             space-and-orientation="indented-estimated">
         <THEAD noTR="1">
            <TR no="1" isLast="true">
               <TD rowspan="1" colspan="1">Parameter</TD>
               <TD rowspan="1" colspan="1">Value</TD>
            </TR>
         </THEAD>
         <TBODY noTR="4">
            <TR no="1" isLast="false">
               <TD rowspan="1" colspan="1"> 
                  <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mmnd" role="manual">Min-Max Number of Days</GUIRef>
               </TD>
               <TD rowspan="1" colspan="1">10 days</TD>
            </TR>
            <TR no="2" isLast="false">
               <TD rowspan="1" colspan="1"> 
                  <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.umml" role="manual">Use Min-Max Inventory Levels</GUIRef>
               </TD>
               <TD rowspan="1" colspan="1"> 
                  <GUIRef href="/baanerp/tc/domains/umml#min.and.max" role="option">Minimum and Maximum Levels</GUIRef>
               </TD>
            </TR>
            <TR no="3" isLast="false">
               <TD rowspan="1" colspan="1"> 
                  <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mnfc" role="manual">Minimum Factor</GUIRef>
               </TD>
               <TD rowspan="1" colspan="1">0.9</TD>
            </TR>
            <TR no="4" isLast="true">
               <TD rowspan="1" colspan="1"> 
                  <GUIRef href="/baanerp/tc/trm/tctrm1135m000#tctrm135.mxfc" role="manual">Maximum Factor</GUIRef>
               </TD>
               <TD rowspan="1" colspan="1">1.5</TD>
            </TR>
         </TBODY>
      </TABLE>
      <Paragraph>The following table shows the <Link href="/baanerp/cp/glossary/glossary#000456" role="glossary">forecast</Link> in each forecast period.</Paragraph>
      <TABLE width="60%" border="1" cellpadding="1" cellspacing="1" borderstyle="default"
             space-and-orientation="indented-estimated">
         <THEAD noTR="1">
            <TR no="1" isLast="true">
               <TD align="center" rowspan="1" colspan="1">Forecast period</TD>
               <TD align="center" rowspan="1" colspan="1">Period start date</TD>
               <TD align="center" rowspan="1" colspan="1">Forecast demand</TD>
            </TR>
         </THEAD>
         <TBODY noTR="4">
            <TR no="1" isLast="false">
               <TD align="center" rowspan="1" colspan="1">22</TD>
               <TD align="center" rowspan="1" colspan="1">April 2</TD>
               <TD align="center" rowspan="1" colspan="1">150</TD>
            </TR>
            <TR no="2" isLast="false">
               <TD align="center" rowspan="1" colspan="1">23</TD>
               <TD align="center" rowspan="1" colspan="1">April 9</TD>
               <TD align="center" rowspan="1" colspan="1">49</TD>
            </TR>
            <TR no="3" isLast="false">
               <TD align="center" rowspan="1" colspan="1">24</TD>
               <TD align="center" rowspan="1" colspan="1">April 16</TD>
               <TD align="center" rowspan="1" colspan="1">84</TD>
            </TR>
            <TR no="4" isLast="true">
               <TD align="center" rowspan="1" colspan="1">25</TD>
               <TD align="center" rowspan="1" colspan="1">April 23</TD>
               <TD align="center" rowspan="1" colspan="1">35</TD>
            </TR>
         </TBODY>
      </TABLE>
      <Paragraph>The following table shows how the calculation of
		the minimum and maximum inventory proceeds.</Paragraph>
      <TABLE width="100%" border="1" cellpadding="1" cellspacing="1"
             space-and-orientation="portrait-custom"
             borderstyle="default">
         <THEAD noTR="2">
            <TR no="1" isLast="false">
               <TD rowspan="2" align="center" colspan="1">Period</TD>
               <TD colspan="2" align="center" rowspan="1">10-day period</TD>
               <TD rowspan="2" align="center" colspan="1">Sum of forecast</TD>
               <TD colspan="2" align="center" rowspan="1">Inventory levels</TD>
            </TR>
            <TR no="2" isLast="true">
               <TD align="center" rowspan="1" colspan="1">First day</TD>
               <TD align="center" rowspan="1" colspan="1">Last day</TD>
               <TD align="center" rowspan="1" colspan="1"> 
                  <GUIRef href="/baanerp/cp/vmi/cpvmi0503m100#cpvmi004.mini" role="manual">Minimum Inventory</GUIRef>
               </TD>
               <TD align="center" rowspan="1" colspan="1"> 
                  <GUIRef href="/baanerp/cp/vmi/cpvmi0503m100#cpvmi004.maxi" role="manual">Maximum Inventory</GUIRef>
               </TD>
            </TR>
         </THEAD>
         <TBODY noTR="3">
            <TR no="1" isLast="false">
               <TD align="center" rowspan="1" colspan="1">22</TD>
               <TD align="center" rowspan="1" colspan="1">April 2</TD>
               <TD align="center" rowspan="1" colspan="1">April 11</TD>
               <TD align="center" rowspan="1" colspan="1">150 + (3/7) * 49 = 171</TD>
               <TD align="center" rowspan="1" colspan="1">153.9 (=171 * 0.9)</TD>
               <TD align="center" rowspan="1" colspan="1">256.5 (=171 * 1.5)</TD>
            </TR>
            <TR no="2" isLast="false">
               <TD align="center" rowspan="1" colspan="1">23</TD>
               <TD align="center" rowspan="1" colspan="1">April 9</TD>
               <TD align="center" rowspan="1" colspan="1">April 18</TD>
               <TD align="center" rowspan="1" colspan="1">49 + (3/7) * 84 = 85</TD>
               <TD align="center" rowspan="1" colspan="1">76.5</TD>
               <TD align="center" rowspan="1" colspan="1">127.5</TD>
            </TR>
            <TR no="3" isLast="true">
               <TD align="center" rowspan="1" colspan="1">24</TD>
               <TD align="center" rowspan="1" colspan="1">April 16</TD>
               <TD align="center" rowspan="1" colspan="1">April 25</TD>
               <TD align="center" rowspan="1" colspan="1">84 + (3/7) * 35 = 99</TD>
               <TD align="center" rowspan="1" colspan="1">89.1</TD>
               <TD align="center" rowspan="1" colspan="1">148.5</TD>
            </TR>
         </TBODY>
      </TABLE>
   </ExampleSection>
   <RelatedTopics>
      <SectionTitle> Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000476" role="manual">To work with minimum and maximum inventory</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>