Microsoft Dynamics 365 Blog

Exceptions happens … but should happen exceptionally. That’s the rule!

Under this assumption, if we run into a situation where our customer is getting too many exceptions when planning, it might be time to re-calculate planning parameters or to re-confirm if current policy is still recommended. What is NAV design around this? When stock goes below safety stock, we have an exception. This situation (stock drops below safety) should not happen on a regular basis. Safety stock is calculated to mitigate exceptions on demand or supply profiles (ie. uncertainty of respecting lead times). Thus,safety is built to handle exceptions. If this is not the case, it is time to re-calculate this. Opposite to this safety stock are other planning parameters as Reorder point where dropping below this is not an exception but regular business. Thus, there is a conceptual difference on these two which should answer what is the parameter which should allow us handling exceptions.

For those who are interested, there are many good planning websites which provide info on how “Safety Stock” should be calculated. This safety stock calculation is not a NAV functionality but a business planning standard.

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