Supply Chain

11. How will the maximum stock level be determined?

Maximum stock level will be determined by using ‘Maximum stock level before covering requirement’ parameter.

For this parameter, No indicator is set in the standard settings. The maximum stock level is then considered the limit for the physical stock. Even if more requirements exist, the system only creates an order proposal to bring the stock level up to the maximum stock level.

If this parameter is used, the system calculates the lot size using the procedure previously used. The system calculates the lot size in two steps using two formulas. The system then creates the order proposal using the greater of the two lot sizes.

(Formula1)

Lot size = maximum stock level - current warehouse stock - existing fixed receipt elements

(Formula2)

Lot size = reorder point + total requirements - current warehouse stock - existing fixed receipt elements

1. Explain the role of the routing master in supply chain management?

Routing master is defined as a task list that enables you to plan the production of a material. The various activities involved in completing a task are referred to as operations. A routing must have at least one operation (i.e. activity) and as many as needed to describe the production process. Each operation is assigned a number. Routing basically help in scheduling the production process. Each operation on a routing must reference:

– The work center where the activity will take place

– How time required to complete the activity at that work center.

It is a representation of how the user processes work on his/her floor. Typically, a routing is made up of a series of operations called the routing steps. However a routing many include other steps such as hold or scrap or other routings. Since routing is a step of operations required to manufacture a good, it is essentially part of supply chain management.

A routing determines the sequence of individual operations that are necessary to produce a finished product. A routing contains operations and information about the work centers at which the individual operations are to be carried out, as well as standard times.

Routing plays a critical role in production