D365 Master Planning | Priority Base planning |Priority calculation method |Priority Range | Part#2

Hello everyone and welcome back to the second part of priority base planning.

In the first part, we have seen the pre-requisite setup for using the priority base planning and run a scenario in which calculation priority was “% of maximum inventory”. If you have not read that blog so I would recommend going through part 1 Priority Planning Part1 before continuing to this part so that you can easily understand the prerequisite setup and difference in the priority calculation method.

In this part, we are going to use the second priority calculation method which is “Priority Range”

When we select this method, You will notice the “Planned order creation” field will be enabled. Here we have two options.

1.?????Single supply with most important priority: Don't split planned orders based on the priority range. The planning priority for a planned order is based on the most important priority range (that is, the lowest planning priority value).

2.?????Split according to priority range: Split the demand into multiple planned orders, based on the planning priority ranges. The planning priority for individual planned orders is defined by the planning priority of the related planning priority range.

To understand the difference between both types, I have set up two priority models whose calculation method is the same “Priority range”. But the Planned order creation strategy is different as you can see below.

Priority model 1:?Priority range with planned order creation strategy “Single supply with most important priority”.

Priority model 2: Priority range with planned order creation strategy “Split according to priority ranges”.

As you can see in both models the only difference is the planned order creation strategy.

Moreover, In this model four priority has been defining as below:

1.?????When on-hand stock is 0. It will have priority 1 or the highest.

2.?????When on-hand stock is greater than 0 and less or equal to the minimum inventory quantity. It will have priority 30 or the second highest priority.

3.?????When on-hand stock is greater than or equal to minimum quantity but less than re-order points. It will have a priority 50.

4.?????When on-hand stock is greater than or equal to reorder but less than the max quantity. It will have the least priority of 70.

?Now, create two different coverage groups and used these two priority models there.

Coverage group1: Priority range with Single Supply

Coverage group2: Priority range with Split according to priority

Product Setup:

In this demonstration, I have created two new items with the same configuration and stock level but I have assigned different coverage groups so that we can understand the impact of these two different strategies as you can see below:

Item PBP-002 with single supply coverage strategy.

Item PBP-003 with single supply coverage strategy.

On-Hand Inquiry

Now let’s have a look at the on-hand level before running the planning job so that we can understand the difference between both methods. I have entered the same stock level for both items as you can see.

Item PBP-002:

Item PBP-003:

Scenario Results.

Now let’s run the requirement plan for both items to check the result and see the difference between both strategies.

Go to Plan tab > Requirement > Net Requirement.

Strategy1: Single supply with the most important priority

?According to the priority model, we have given 30% priority if the stock level is less than the minimum inventory and 50% if the stock is above the minimum level but below to the reorder level.

In warehouse 12Poliraw (WH2). The stock level was 80 which is less than the minimum stock level. That’s the reason systems gave 30% priority.

Whereas in warehouse 11PORTFR (WH3). The stock level was 400 which is above the minimum stock level but less than the re-order level. That’s the reason system gave 50% priority.

This strategy created a single-line planned order and gives priority according to the stock level available in the warehouse.

Strategy2: Split according to priority range

As mentioned earlier, We have set up the same priority models with the same priority level but the planned order creation strategy is different. If we run the planning against this model, we will have a different result.

According to the priority model, We have given 30% priority if the stock level is less than the minimum inventory and 50% if the stock is above the minimum level but below to the reorder level.

In warehouse 12Poliraw (WH2). The stock level is 80 which is less than the minimum stock level. But systems have created three planned orders with different priority as you can see.

Actually, this method has divided the demand into multiple lines.

As you can see, in the first planned order, 120 quantity is required to meet the minimum stock level. And this line has 30% priority as per our priority model.

Whereas, in the second line we need 300 quantities to reach to the re-order level and it has 50% priority according to our priority model.

And in last, we need 500 quantities to reach to the maximum stock level and it has 70% priority according to our priority model that’s why systems allocated 70% priority to this line.

Now if we go to see the impact in warehouse 11PORTFR (WH3) where the stock level is 400 which is above the minimum stock level but less than the re-order level. Systems have generated two planned orders. One for reaching to the reorder level, and 2nd for reaching to the maximum stock level.

That's all for the day.

I hope you guys will like this blog. If you have any feedback feel free to share

Regards

Muhammad Shoaib Hussain

D365 Supply Chain Management | Production | Retail | Finance Consultant.

Contact # +44 7513826768

Email # [email protected]