Operations Research topics: SAS/OR,
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MIRP Procedure -Safety stock,leadtime and reorderlevel

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Contributor
Posts: 23

MIRP Procedure -Safety stock,leadtime and reorderlevel

Dear Sir,

 

I am using proc mirp for simulations.  In inventory concept reorderlevel covers damand during leadtime and safety stock for any uncertainty.  This means Reorderlevel=Leadtimedemand+Safetystock..  Is it true for MIRP outputs also?

 

I am getting 0 reorder level but safety stock > 0 but less than 1

 

Thanks

Lokendra 

SAS Employee
Posts: 4

Re: MIRP Procedure -Safety stock,leadtime and reorderlevel

Hi Lokendra,

 

The safety stock at the mirp output is based on (order upto level). It is calculated by

(order upto level) - (demand durding leadtime as well as PBR).

 

For your case, I think (order upto level) is greater than (demand durding leadtime as well as PBR).

 

Thanks,

KDuck

Contributor
Posts: 23

Re: MIRP Procedure -Safety stock,leadtime and reorderlevel

Dear Sir,

 

What is the difference between reorderlevel and safety stock?  (order upto level) - (demand durding leadtime as well as PBR)-  This is seems to be reorder level. Please refer the attached diagram. 

 

Reorderorder level has two components =Safety stock to meet uncertainties + Leadtime as well as PBR demand.

 

Please correct me if my understanding is not correct.

 

thanks

Lokendra


Inevntory Model.PNG
SAS Employee
Posts: 4

Re: MIRP Procedure -Safety stock,leadtime and reorderlevel

Hi Lokendra,

 

The difference between reorder level and safety stock is the demand during lead time.

PBR is defined as periods between two replenishment orders. If demand for PBR is considered like proc mirp, then orderupto level is identical to

(safety stock to meet uncertainties) + (demand during PBR) + (demand during lead time)

 

Thanks,

KDuck

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