Family Items

Family items represent the aggregate item families, which are planned (for example, the family of items which require a critical production center). In terms of the hierarchical structure, these items are above the sold items (which by definition correspond to the hierarchical level of 0). For the family items, the level code is represented by an asterisk in the Item window.

For each family item, aggregate sales forecasts and projected productions are entered in the Sales and Operations Plan window.

Each Family item is characterized by three bills of material: the Resource bill of material, the Commercial bill of material and the Planning bill of material. These data are used by the functions of the S&Op Plan menu, namely the S&Op Plan Disaggregation function, the S&Op Plan Computation function and the Resource load profiles function.

The Item maintenance window displays the Additional Information panel. In this panel, the list price and the standard cost of each family item can be entered.

The Item maintenance window displays the S&OP panel. In this panel, costs and constraints are defined:

A given type of constraint is selected/activated by checking corresponding check box.  When a constraint type is not selected, it is not taken into consideration for the S&OP optimization procedure.

Sub-contracting only. When this option is selected, the whole production flows for the family item are subcontracted, but still contribute to the projected turn-over.

Sub-contracting possible. When this option is selected, production flows for the family item can either be subcontracted, or internally produced. 

Maximum number of subcontracted units per period. This cell defines the maximum of units that can be subcontracted per period.

 Cost of subcontracted items. This cell defines the family item cost when subcontracted. Usually this cost is greater than the internal production cost. 

Min coverage (in % of next period demand). This cell defines the required inventory level at the end of each period. As demand is typically seasonal, this inventory target is expressed as a percentage of each next period demand. For example, in some case the manager chooses to require a safety inventory at the end of each period which is equal to 50% of the demand of the next period.

Max coverage (in % of next period demand). This cell defines the admissible upper bound for the inventory at the end of each period. This permits the manager to avoid excessive inventory levels that can be very costly especially for items with short life cycles or very uncertain demands. Again, these periodic upper bounds are expressed as percentages of next period demands.

Minimum Inventory (all periods). This cell defines the required inventory level, expressed in units, at the end of each period.

Required Final Inventory (end of last period). This cell defines the required inventory level, expressed in units, at the end of the planning horizon. This final inventory will be the strictly positive initial inventory for the next year aggregate planning.

Max stockout (in % of next period demand). This cell defines the admissible level of stockouts (typically corresponding in practice to high level demands). As demand is typically seasonal, the periodic admissible stockout levels are expressed as percentages of each next period demand.

Percentage of backlogged sales. In case of backlogged demands, a fraction of the customers cancel their orders, while other customers accept delayed deliveries. In this case, backlogged demands are delayed to the next period. This cell defines the level of admissible backlogged sales (typically corresponding in practice to high level demands). Again, as demand is typically seasonal, the periodic admissible stockout levels are expressed as percentages of each next period demand. The 0 (%) value means that any stockout corresponds to a lost sale. On the contrary, the 100 (%) value means that any stockout can be backlogged.

 Stockout cost (per unit per period) if backlogged sales. This cell defines the cost to be associated to a one-unit stockout when this stockout can be backlogged.

 Stockout cost (per unit per period) if lost sales. This cell defines the cost to be associated to a one-unit stockout when this stockout cannot be backlogged and induces lost sales.