The Service Level Optimization screen allows users to graphically represent the key drivers of inventory policy parameters, Optimal Replenishment Quantity (ORQ) and Service Stock (SS). The screen also allows for simulation of the impact of changes to the input parameters. The simulation capability helps users to observe the sensitivity of ORQ and SS to changes in the input parameters.
Service Level Optimization Screen
Inputs / Outputs
The middle section of the screen, Inputs, shows the Simulation (Sim) Values and Current Values of all the possible inputs to the ORQ and SS calculations. The Sim Values column is updateable. To update an input value, double click in the field and enter the new value.
The Outputs section displays the minimum total annual cost and corresponding optimal service level based on the Simulation Values and Current values.
Output Detail
The bottom section of the screen, the output detail section, displays the ORQ and SS values for each tested service level. The calculated costs at each service level are also shown. The service level that corresponds to the lowest total annual cost is highlighted in gray. The two data columns on the right, Pre-expedite Hits and Total Hits show the calculated demand hits, based on total demand and average demand size, for each test service level.
Description of Fields within the SLO Window
| Field | Description |
| Carry Cost | The cost to hold inventory in a specific location. |
| Disservice Cost | The cost for lost demand. |
| Expedite Cost | The cost associated with any rushed shipments. |
| ORQ | Optimal Replenishment Quantity - The GAINS calculated quantity of stock that is recommended for replenishment. |
| Pre-Expedite Hits | The number of hits that we are expecting to hit without expediting based on the current service level. |
| Receiving Cost | Fixed cost associated with ordering or receiving shipments. |
|
Service Level |
Represents the percent of times an item is desired to be available for shipment in full amount and on-time. |
| SS | Service Stock - Buffer stock to account for any planning error and/or spikes in demand |
| Total Cost | The sum of Carry Cost, Receiving Cost, Expedite Cost, and Disservice Cost. |
| Total Hits | The projected amount of demand hits for the SKUL for the next year. |
Output Graph
The graph displays each of the cost factors, as well as total annual cost, for each tested service level. The graph has three tabs – Current, and Simulation – for both simulated and current values displayed together, and one tab each for the values displayed separately. The graph allows several manipulation options, each accessed through the right-click menu.
Output Graph
- Select Save… to save the chart as a .PNG image file for later use.
- Select Zoom In to change the axes ranges.
- Select Copy as image to save the chart image to the clipboard, for subsequent pasting into another document (email, spreadsheet, word processing document).
- Select Download as XLSX to export the data to an Excel spreadsheet.
- Select Download as CSV to export the data as a CSV File.
Running Simulations
The screen enables users to review the impact of changes to ORQ and SS input parameters without actually changing the live production values or re-running the full GAINS update.
1. Retrieve the desired SKUL to simulate.
2. Enter the alternate input values to simulate by double-clicking in the desired row of the Sim Values column of the SLO Inputs section.
Simulation Value Change
3. Click the “Run SLO Simulation” icon in the toolbar.
Run SLO Simulation
4. The results can be reviewed in three ways:
- View the total impact in the SLO Outputs section, Sim Values column.
- View the detailed results in the bottom section, Simulation tab. The changes will be displayed in red.
- View the results graphically in the graph pane, either on the Combined tab or the Simulation tab.
View Simulation Changes