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OPTIMIZATION http://help.sap.com/saphelp_scm70/helpdata/EN/76/8b623c8a6da167e10000000a1 1402f/frameset.

htm Supply Network Planning Run Comparison of the Planning Methods Optimization-Based Planning Application Examples for the SNP Optimizer Finite Capacity Planning Source Determination (Optimizer) Consideration of Incoming Quota Arrangements Lot Size Planning Stock Planning Optimization Profiles Decomposition Running the Optimizer from the Interactive Planning Desktop Definition of Time-Based Constraints in Interactive Planning Running the Optimizer in the Background Automatic Cost Generation Definition of the Business Goals Costs Maintenance Prioritization of Customer Demands and Demands with High Volume Penalty Cost Group Profile Sequence-Dependent Lot-Size Planning Cross-Period Lot Size Planning

Application Logs for Optimizers Optimization Input Log Resulting Costs of Optimization Result Indicators Explanation of the Optimization Results Configuration of the Explanation Tool Optimization Run Termination

Supply Network Planning Run


Use
You can use any of the following planning methods to perform the planning run in Supply Network Planning (SNP): Optimization-Based Planning Heuristic-Based Planning

Supply and Demand Propagation You can run optimization-based and heuristic-based planning interactively from the interactive planning desktop in Supply Network Planning or you can run them in the background. You run supply and demand propagation in a dedicated planning book in interactive Supply Network Planning. Based on these planning methods, SNP supports special planning processes, such as: Aggregated Planning Planning with Aggregated Resources Product Interchangeability Procurement Scheduling Agreement in Heuristic-Based SNP Planning Subcontracting with Source Location in SNP Subcontracting with Third-Party Provision of Components in SNP

Direct Delivery from Production Plant to Customer For detailed information about the individual planning methods and processes, see the related sections of this documentation. Your individual planning environment influences which planning method would be the most suitable for your requirements. For a comparison of the heuristic and optimization planning methods with Capable-toMatch (see below), see Comparison of the Planning Methods.

See also
Capable-to-Match planning (CTM) is an alternative to the optimization-based or heuristic-based planning methods from Supply Network Planning. For more information, see the Multilevel Supply and Demand Matching section of the SAP APO documentation.

Comparison of the Planning Methods

This topic compares the planning methods of Supply Network Planning (SNP), optimization-based planning and heuristic-based planning, as well as the Capable-to-Match (CTM) planning method. For more information, see Optimization-Based Planning, Heuristic-Based Planning and Capable-to-Match (CTM). We recommend that you use optimization-based planning or CTM planning if one of the following conditions applies to you: Your business environment is subject to strict constraints (for example, you must take into account production capacities, transportation capacities, storage capacities, and/or handling capacities) You have alternative production locations and sources of supply (locations, production process models, and external procurement relationships) You can decide between early production and late production You share resources, meaning that multiple products are produced simultaneously on one resource

If you wish to plan on an infinite basis (meaning that you do not wish to consider capacities) for the medium to long-term horizon, we recommend that you use heuristic-based planning. If you wish to plan or fulfill demands on the basis of priorities, we recommend that you use CTM planning. The following table describes the main features of each planning method: Business Environment

Area

Heuristic and Capacity Leveling

Capable-to-Match

Optimizer To create a feasible plan with minimum costs

Business Objective

To create a feasible plan To create a feasible plan with few by fulfilling the highest bottleneck resources priority demand first

Demand Type Capacity

Not relevant

Heuristic run: Based on the assumption that capacity is infinite (infinite capacity planning) Capacity leveling: This is

To maximize profits Demand can be Prioritized demand and aggregated for three demand-specific supply demand classes or by strategies customer locations Finite capacity planning Finite or infinite (taking capacity capacity planning constraints into account) or a simulation of infinite planning

Area

Heuristic and Capacity Leveling a step following on from the heuristic run to level capacities

Capable-to-Match

Optimizer

Planning Approach

Bucketed (period-based) planning

Bucketed or continuous planning

Bucketed planning

Constraints and Business Scenarios

Area

Heuristic and Capacity Leveling Production Transportation

Capable-to-Match

Optimizer

Resources Handling (heuristic only)

Production Transportation Handling

Production Transportation Storage

Target Stock Levels

Lot Sizes

Source Determination (sourcing) Time-Based Production Parameters

Handling Can use absolute target Flexible definitions for the stock levels or target days' heuristic but capacity Can use absolute target supply for planning. The leveling does not consider stock levels or target days' optimizer calculates the the target stock level supply for planning target days' supply before method specified the actual optimization run Considers lot sizes for production and transportation Considers crossperiod lot sizes for Considers lot sizes for Considers lot sizes for production production, transportation, production, transportation, and procurement and procurement Transportation lot sizes have to be used to map lot sizes for procurement Cost-based sourcing decisions Based on priority, costs Based on quota (PPM/PDS and arrangements and transportation), or quota Can be used to priorities arrangements modify quota arrangements Considered Considered Considered

Area

Heuristic and Capacity Leveling Material staging is not a constraint. A backlog is created for externally planned products

Capable-to-Match

Optimizer Can consider material constraints for externally planned products or by setting a high procurement cost for procured products Not supported 1:1 - Supports supersession (supersession chains and form-fitfunction classes)

Considers material constraints; external Material products are not planned Constraints and do not represent a material constraint Supply You can define supply Not supported Categorization categories 1:1 - Supports Supersession 1:1 - Supports supersession (forward and supersession (supersession interchangeable Discontinuation chains and form-fitsupersession chains and of Products function classes) form-fit-function classes) Supports aggregation planning and Supports aggregation disaggregation. You can Aggregated planning and also choose to aggregate Planning disaggregation demands and supply on a time basis or by order types for product Maximum Stock Levels by Not considered Not considered Product Push Distribution Not supported (but is Supported by supply Stock to supported by deployment) distribution Downstream Locations

Supports aggregation planning and disaggregation

Considered as a constraint

Can be controlled using storage costs You can define a minimum available capacity for a resource and assign costs for falling below this minimum level (this only applies to production resources) Can make a distinction between standard and extended capacity

Minimum Resource Utilization

Not supported

Can consider minimum receipt quantities

Resource Capacity

Does not make a distinction between standard and extended capacity

Does not make a distinction between standard and extended capacity

Demand Prioritization Shelf Life

Demand can be Capacity leveling does not Demand can be sorted by aggregated for three recognize demand different sort criteria demand classes or by priorities customer locations Not considered Can consider shelf life Can consider shelf

Area

Heuristic and Capacity Leveling

Capable-to-Match constraints in a restricted way (for example, CTM does not consider shelf life propagation).

Optimizer life constraints in a restricted way (see SAP note 579556) Batches are not recognized Supported (the subcontractor has to be modeled as a location)

Supported (the Subcontracting subcontractor has to be modeled as a location) Scheduling Agreement Supported Processing
Configuration

Supported (the subcontractor has to be modeled as a location) Not supported

Not supported

Area

Heuristic and Capacity Leveling

Capable-to-Match

Optimizer

Relevant Master Data

Locations Products Resources (singlemixed, multimixed, and bucket resources) PPMs and PDSs (SNP) Transportation lanes

Locations Products Resources (singlemixed or multimixed, and bucket resources) PPMs and PDS (SNP and PP/DS, but some restrictions) Transportation lanes

Flexibility of Algorithm

Macros can be used to modify heuristic values that are entered

CTM profile (supply profiles, demand profiles, and so on) You can modify aspects of the calculation by changing profile settings and maintaining parameters

Locations Products Resources (singlemixed or multimixed, and bucket resources) PPMs and PDSs (SNP) Transportation lanes SNP optimizer profile Optimizer costs Has a user function for modifying the optimizer input log Macros can be used to modify optimizer values

Area

Heuristic and Capacity Leveling

Capable-to-Match

Optimizer

Daily Operation

After you have configured the parameters, the heuristic can run automatically

Transparent results Explanation of planning results by the system

Comprehensibility

that are entered After you have After you have fine-tuned configured the the costs, the optimizer parameters, CTM can run can run automatically automatically Transparent results based on priorities. The analysis complexity is Requires some governed by the understanding of supply chain cost trade offs complexity Order tracking by Cost summaries pegging are available after Graphical the optimization representation of run results

Explanation of planning results by the system

Integration with PP/DS

Bucketed plans need to be converted into continuous plans

Bucketed plans need to be converted into continuous plans Continuous plans can be created

Bucketed plans need to be converted into continuous plans Recognizes material flow, capacity consumption, and setup statuses from PP/DS Have to replan all demands Can use the SNP optimization bound profile to restrict replanning

Net Change Planning

Supported

Supported - with options for dynamic and fixed pegging

Optimization-Based Planning
Purpose
The SNP optimizer offers cost-based planning. This means that it searches through all feasible plans in an attempt to find the most cost-effective (in terms of total costs). Total costs refers to the following:
Production, procurement, storage, and transportation costs Costs for increasing the production capacity, storage capacity, transportation capacity, and handling capacity Costs for violating (falling below) the safety stock level Costs for late delivery Stockout costs

You use the SNP cost profile to fine-tune the relative importance of different cost types. In the optimizer view, a plan is feasible when it satisfies all the Supply Chain Model constraints that you set in the SNP optimizer profile. A feasible solution might involve due date or safety stock constraint violations. Due dates and safety stocks are Soft Constraints (constraints to which you assign violation costs). The optimizer only proposes a plan that will violate soft constraints if, according to the costs specified in the system, it is the most cost-effective plan. The optimizer makes sourcing decisions within optimization-based planning. This means that it uses costs as a basis for deciding the following:
Which products are to be produced, transported, procured, stored, and delivered and in which quantities (product mix) Which resources and which production process models (PPMs) or production data structures (PDSs) to use (technology mix) The dates and times for production, transportation, procurement, storage, and delivery The locations for production, procurement, storage, delivery, and the source and destination locations for transportation

Since you can enter PPMs or PDSs with fixed resource consumption in master data, you can also include setup operations in Supply Network Planning. Therefore, you can also use the SNP optimizer for lot size planning. The optimizer also supports cross-period lot size planning where orders are grouped into large lots due to high set up costs. The optimizer uses the linear programming method to take account of all planningproblem-related factors simultaneously within one optimal solution. As more constraints are activated, the optimization problem becomes more complex, which usually increases the time required to solve the problem. As a rule, you should run optimization as a background job.

The optimizer makes a distinction between continuous linear optimization problems and discrete optimization problems. Linear Optimization You can choose one of the three following methods in the SNP optimizer profile to solve continuous linear optimization problems:
Primal simplex method Dual simplex method Interior point method

All three methods arrive at an optimal solution. Runtime could be the main influencing factor when deciding which of these methods to use. However, there is no general rule for selecting the best method for a given problem (apart from to test each method individually). A good way of assessing the application is to do a benchmarking based on a test scenario. This is because the optimal choice of method depends more on the structure of the supply chain and less on the input data. Therefore, in a productive environment, daily benchmarking is not necessary. Discrete Optimization A problem is not continuous (and is therefore discrete) in Supply Network Planning, when the model contains:
Discrete (integer-value) lot sizes for transportation or PPMs/PDSs Discrete means of transport Discrete increase of production capacity Minimum lot sizes for transportation or PPMs/PDSs Piecewise linear cost functions for transportation, production, or procurement Fixed PPM/PDS resource consumption Fixed PPM/PDS material consumption Cross-period lot size planning

If you want the optimizer to consider any of the above constraints, you must use one of the discrete optimization methods from the SNP optimizer profile. The piecewise linear cost function that you can define in master data makes a distinction between the convex cost function (cost per unit increases for higher volumes; for modeling overtime or night shifts for instance) and the concave cost function (cost per unit decreases for higher volumes; for modeling freight rates for instance). Convex cost functions do not complicate the planning problem and can be solved efficiently. However, they can also be modeled using alternative modes without using piecewise linear cost functions.

Mode 1 with $50 per unit and a limited capacity of eight models

Mode 2 with $100 per unit and a limited capacity of six models

Convex functions of labor cost per day, assuming eight normal working hours and a maximum of six hours of overtime paid at double time

In contrast, concave piecewise linear cost functions cannot be solved by an LP solver but only by using discretization methods (mixed integer linear programming). If piecewise linear functions are modeled but the optimizer is run without discretization or the discretization horizon is smaller than the planning horizon, the optimizer takes into account the linear cost function defined in addition to the piecewise linear cost function.

The discrete optimization method cannot be used with strict prioritization (see below). Using the discrete optimization method can significantly increase runtime requirements. Note that Supply Network Planning is a medium-term planning function and its focus should not be on solving integer problems (that is, using the discrete optimization method).

Prioritization The optimizer can differentiate between the priority of sales orders and forecast demand. With strict prioritization, sales orders always have priority 1, the corrected demand forecast priority 5, and the demand forecast priority 6. Within every priority class, the system uses all available cost information to determine the final solution. When cost-based prioritization is used, the optimizer uses penalty cost information from the product master data (the SNP1 tab page) to determine the optimal solution. Decomposition You can use the decomposition methods, defined in the SNP optimizer profile, to reduce runtime and memory requirements for optimization. Decomposition may also represent the only way for the optimizer to find a feasible solution in the event of large discrete problems. For more information, see Decomposition. Aggregated Planning - Vertical To reduce the size of the model to be optimized, the optimizer can restrict planning to location product group level (assuming you have defined the demands at the lower level). Plans are distributed to lower level products based on demand for the lower level products. To plan at product group level, you must define hierarchies for products and locations in the hierarchy master. This data is used to generate the location product hierarchy. You also must define the PPMs or PDSs for the product groups and create the PPM or PDS hierarchy in the hierarchy master. In the SNP optimizer profile, if you set the Aggregated Planning - Vertical indicator, the products are automatically aggregated to the relevant groups for planning and after planning is complete, they are disaggregated again.

Aggregated Planning - Horizontal This function allows you to plan a subset of your supply chain. You can limit the products or locations to be taken into account during the optimization run. For example, if optimization is only run to plant level but forecasts are at customer level, the optimizer can sum (aggregate) the demands to plant level and use this value during the optimization run. The transportation times, for example, from the plant to the distribution center and to the customer, as well as the duration of the PPMs or PDSs, are also taken into account. Incremental Optimization Incremental optimization is the name given to optimization-based planning that is run for only part of the model or on the basis of an already existing plan. The plan might be infeasible with this type of optimization since the optimizer cannot plan receipts for shortages that are the result of fixed orders from previous planning runs. It is also possible that the optimizer will ignore input products (and associated stock) that are defined in PPMs/PDSs or products that are available for procurement at a source location using a transportation lane (source location products). To prevent this, you can specify in the SNP optimizer profile that the optimizer is to take into account the stocks of non-selected input products or source locations products. You can also specify that the dependent demand and distribution demand of fixed orders is to be treated as an independent requirement, meaning that the optimizer will permit shortages subject to the calculation of penalty costs for not delivering. You define penalty costs for not delivering for customer demand, the demand forecast, and corrected demand forecast in the product master data. You can also set that the optimizer is to consider the dependent demand and distribution demand of fixed orders, and the stocks of non-selected input products or source location products as a pseudo-hard constraint. This means that shortages are possible but are subject to the calculation of infinitely high penalty costs that are internally defined in the optimizer. Setting this ensures that the optimizer will only permit shortages if it cannot find any other feasible solution.

Process Flow
...

1. 2. 3.

You run the optimizer. You run deployment. You run the TLB.

The Optimization Run

Note: The optimizer plans all distribution demands for all locations in the distribution network before exploding the BOM and processing dependent demand at the production locations. Factors Considered During the Run
Valid transportation lanes Lead times Transportation capacity Transportation costs Handling capacity Handling costs Production capacity Production costs Storage capacity Storage costs Time stream (location master data) Lot size (minimum, maximum, and rounding value) Scrap Alternative resources Penalty costs for not fulfilling demand (supply shortage) Safety stock violation penalty costs Procurement costs Shelf life

Cost multipliers Location Products Fixed PPM/PDS resource consumption Fixed PPM/PDS material consumption

Other Considerations
The optimization run results do not include pegging orders back to the original individual requirements because requirements are bucketed. Since orders are not pegged back to the individual requirements, Supply Network Planning does not support order-based planning. After the optimization (or heuristic) run, it is not possible to determine information about links between specific planned orders and original sales orders (however, CTM can provide exactly this information by tracking orders). The optimizer considers the entire capacity and the entire alternative capacity that is globally available (at all locations). In the event of a capacity overload, the optimizer, depending on the system settings, either does not provide a solution or increases the capacity based on a penalty cost calculation. The optimizer considers all active types of capacity constraints, including transportation, production, handling, and storage constraints. The settings in the SNP optimizer profile govern whether or not a constraint is active. The optimizer takes into account the shelf life of products in a restricted fashion (for more information about this, see Stock Planning).

See also: Optimization Profiles Running the Optimizer from the Interactive Planning Desktop Running the Optimizer in the Background Cross-Period Lot Size Planning Comparison of the Planning Methods Application Examples for the SNP Optimizer

Application Examples for the SNP Optimizer


Below is a list of examples showing where you can use the SNP optimizer within production planning and distribution resource planning and what you should keep in mind: 1. 2. 3. 4. Finite Capacity Planning Source Determination (Optimizer) Lot Size Planning Stock Planning

Finite Capacity Planning


Purpose
It is particularly advisable to use the SNP optimizer to plan capacities as finite if you have limited business resource capacities and these limited capacities have an impact on your production planning and distribution resource planning. By already planning capacities as finite in Supply Network Planning (SNP), you can take capacities into account and make it easier for the subsequent detailed scheduling (such as SAP APO Production Planning and Detailed Scheduling, PP/DS) to create feasible plans. Furthermore, by using the SNP optimizer to plan finite capacities, you can include a possible extension of your capacities into your plan, subject to the calculation of additional costs. You can use the SNP optimizer to plan the following resource categories and types as finite:
Resource categories:

Production resources Transportation resources Handling resources Storage resources

Resource types:

Single-mixed and multimixed resources Bucket resources Transportation resources

Integration
The SNP optimizer takes into account the net available capacity only, meaning that it checks whether the capacity available in SNP is already being used by other system application areas (PP/DS, deployment, or the Transport Load Builder, for example) or by fixed SNP orders.

For single-mixed and multimixed resources, the SNP optimizer subtracts the capacity consumed by PP/DS, for instance, from the capacity available in SNP. If the capacity consumed by PP/DS exceeds the aggregated available capacity in a bucket in SNP, the optimizer assumes that there is an available capacity of 0 in the corresponding bucket and plans no further capacity consumption in this bucket.

Prerequisites
The prerequisites for finite capacity planning are the same as those for general optimization-based planning:
1. Planning Area Administration Master Data Setup for the Optimizer Model/Version Creation Supply Chain Model Setup Release of the Demand Plan to SNP

Features of Finite Capacity Planning


General Information
2. Generally, the SNP optimizer takes into account all model constraints simultaneously. This means that the optimizer takes into account the available capacity of all resources at the same time. Thus, during multilevel production, for example, all the manufacturing levels are incorporated simultaneously into planning.

In the SNP optimizer profile, you can set which capacity constraints (production capacity, transportation capacity, handling capacity, or storage capacity) you want the optimizer to take into account.
3. 4. The optimizer determines the available capacity based on the defined factory calendar, meaning that it only uses days defined as workdays to determine the bucket capacity. You can define multiple capacity variants for resources and label these as the minimum, normal, or maximum available capacity. Thus, you can let the optimizer decide to increase capacity or fall below the minimum capacity subject to the calculation of additional costs. Since the optimizer generally chooses the solution with the lowest costs, it will only increase capacity or fall below the minimum if this course of action is the most cost-effective total solution despite the additional costs.

You define the costs for the capacity variants with minimum, normal, or maximum capacity in the quantities/rate definition or the capacity profile of the resource master data. To set the status indicator, go to the resource initial screen and choose: Current Settings -> Capacity Variants (see also, Setup for the Optimizer). Master Data

Note that the optimizer takes into account the minimum available capacity and the costs you defined for a capacity variant with the status Normal Capacity only for production resources.

Production Resources Capacity Consumption


5. The SNP optimizer takes into account the capacity consumption of a production resource, which you define in the production process model (PPM) mode. One PPM can load several resources and one resource can be loaded by several PPMs. The duration of an SNP PPM (that is, the sum of the duration of all PPM activities) is fixed. It has no influence on resource consumption and instead is used only for scheduling within the PPM.

The resource consumption defined per activity is distributed evenly over the length of the activities. This means that the optimizer ignores the consumption type defined for the activity and always assumes that consumption is continuous (consumption type C).
6. If you use the linear optimization method, the optimizer only takes into account the variable resource consumption defined in the PPM. If you want the optimizer to also take into account fixed resource consumption, you have to choose discrete optimization in the SNP optimizer profile and define a discretization horizon for the Fixed Material and Resource Consumption. This is necessary if, for instance, you want to use fixed resource consumption to model setup times during lot size planning with the SNP optimizer (see also, Lot Size Planning). Note that the optimizer ignores the fixed resource consumption defined in the PPM if you choose the linear optimization method in the SNP optimizer profile. However, fixed resource consumption is taken into account if orders are created in liveCache during planning. This can cause a resource overload to be displayed in the capacity view of interactive Supply Network Planning. Therefore, if you want the optimizer to take into account the fixed resource consumption, choose discrete optimization or do not define a fixed resource consumption in the PPM. If you are running an integrated SNP and PP/DS planning and set the Lot Size Planning: Not Cross-Period indicator in the SNP optimizer profile (the Integration tab page), fixed resource consumption is not taken into account when creating SNP orders in liveCache if there is already an existing PP/DS order for the associated PP/DS PPM (see also the F1 help at the indicator). This also applies for Cross-Period Lot Size Planning if you set the accompanying Cross-Period Lot Size Planning indicator. 7. The optimizer also takes into account time-based resource consumption that you defined in the PPM. You can use time-based consumption to model varying consumption levels over the course of the bucket. For example, you could include the following information in your plan: A machine consumes more lubricant at the beginning of production than it does towards the end.

Available Capacity
8. For the maximum available capacity variant of production resources (see above), you can define that the optimizer is permitted to either increase the capacity by this variants entire available capacity (an entire layer, for example), or not increase it at all. In this instance, the optimizer either takes into account the entire costs of the increase or no costs at all. In the SNP optimizer profile, choose the discrete optimization method and define a discretization horizon in the Discrete Production Capacity Increase field.

Capacity Costs
9. You can also define time-based costs for increasing the capacity of production resources. For a daily planning buckets profile, you can define that the increase costs more on a Monday than it does on a Tuesday, for example.

10. You also have the option of defining costs for the normal capacity variant (standard capacity) for production resources. You can specify these costs (also on a time basis) per capacity unit and bucket. The costs incurred are proportional to the resource usage. 11. If you wish to define a minimum available capacity (see the General Information section), you have to define costs for falling below it. You can also specify these costs for each capacity unit and bucket. The costs incurred are proportional to the amount fallen below the minimum available capacity.

Constraints
12. Since you can only create one mode per activity in the SNP PPM, you cannot define any alternative resources for a production activity. To define alternative resources, you must create one PPM per mode combination. You can use the SNP PPM Generation With Lot Size Margin function to generate SNP PPMs automatically for multiple PP/DS PPM mode combinations.

Transportation Resources Capacity Consumption


13. The SNP optimizer only takes into account the means of transports variable capacity consumption (per day) that you specified in the Consumption field of the Product-Specific Means of Transport section. You specify consumption for the product that is defined in this section. Consumption is dependent on the transportation duration. If the transportation duration is 0, no resource consumption exists.

If you do not enter a value in the Consumption field or do not define any data for the Product-Specific Means of Transport, the optimizer calculates consumption using the conversion factor for units of measure that you specified on the Units of Measure tab page in product master data. Available Capacity
14. You can assign transportation resources to multiple transportation lanes and so limit the transportation capacity on these transportation lanes. To do this, specify a transportation resource in the Resource field of the Means of Transport section in the transportation lane. 15. In the SNP optimizer profile, you can set that you want the available means of transport to be treated as discrete (in non-divisible integer numbers). If you do this, the means of transport is treated as discrete for each transportation lane. You define the capacity of the means of transport in the Transp.Res.Size field of the resource master data.

You can use this option to model the means of transport that are available in your company (a truck, for example). However, if you commission external transportation service providers, considering means of transport as discrete is not relevant for you. Capacity Costs
16. The transportation costs considered by the optimizer consist of the product-specific transportation costs (that is, the transportation costs you entered in the Product-Specific Means of Transport section in the transportation lane) and the transportation costs for the means of transport (that is, the transportation costs entered in the Means of Transport section). The means of transport costs are dependent on the transportation resource consumption of all the products transported on the transportation lane and the distance that was defined for the transportation lane between the start location and destination location.

17. You can define the means of transport costs either as costs per transportation resource unit or as costs per means of transport. For the costs per transportation resource unit, you do not define a size for the transportation resource. However, for the costs per means of transport, you do define a size (5 t, for example) and set the Integral Means of Transport indicator in the SNP optimizer profile, if required (when activating this indicator, you must also choose the discrete optimization method in the SNP optimizer profile).

If, for instance, you want to model discount scales for the costs per transportation resource unit option, you can use cost functions. Cost functions are most appropriate when you are working together with external transportation service providers. Handling Resources Capacity Consumption
18. You can assign handling units to a location (on the Resources tab page) as handling-in resources or handling-out resources in location master data. The handling-in resource is loaded by inbound shipments (SNP stock transfers) and external procurement during the goods receipt processing time and the handling-out resource is loaded by outbound shipments during the goods issue processing time. 19. You can define the capacity consumption of the handling-in and handling-out resources for the respective location product in location product master data (on the GR/GI tab page). Resource consumption refers to the handling operation and is therefore proportional to quantity but not time.

Constraints
20. You can define a maximum of one handling-in resource and one handling-out resource per location.

Storage Resources Capacity Consumption


21. The optimizer takes into account the capacity consumption of the storage resource that you define for the respective location product in location product master data (on the GR/GI tab page).

Available Capacity
22. The optimizer considers the storage capacity constraint as a soft constraint that can be violated by the optimizer, subject to the calculation of penalty costs. These penalty costs are assigned by the optimizer, which means that you cannot set them in the master data.

Storage capacity is a soft constraint due to the integration between Supply Network Planning, PP/DS, and SAP R/3. There might be initial on-hand stocks or fixed material receipts (from PP/DS, for example) because of this integration that cannot be reduced within a bucket and exceed the storage capacity. To be able to find a solution, the optimizer must be allowed to violate the storage capacity and incur penalty costs. However, due to the high penalty costs incurred, the optimizer will always try not to exceed the storage capacity.
23. In contrast to other resource categories, the available capacity of the storage resource is not aggregated by bucket. The optimizer always takes into account the capacity that is available on the final day of a bucket.

For the storage resource, we recommend that you choose a factory calendar with no non-working days. If the final day of a bucket were a non-working day, the optimizer would assume an available capacity of 0.
24. In addition to the storage resource capacity, you can define a product-specific upper bound for on-hand stock in the location product master. The optimizer takes this upper bound into account if you set the Maximum Product-Specific Quantity Stored indicator in the SNP optimizer profile. The optimizer considers this a soft constraint, meaning that it can be violated subject to the calculation of penalty costs. These penalty costs are assigned by the optimizer, which means that you cannot set them in the master data.

You can also define a time-based upper bound for stock. For more information about this, see Definition of Time-Based Constraints in Interactive Planning. Constraints
25. You can assign a maximum of one storage resource to each location.

See also:
For more information about optimization-based planning and its execution, see:
26. 27. Optimization-Based Planning Running the Optimizer from the Interactive Planning Desktop

Running the Optimizer in the Background

Source Determination (Optimizer)


Purpose
If your company has alternative source of supply options with different costs, you can use the optimizer in Supply Network Planning (SNP) to solve the following issues:
Where to produce, procure, store, and deliver (for example, it can decide whether to use in-house production or external procurement) Which products and product quantities to produce, transport, procure, store, and deliver (product mix) Which resources and which production process models (PPMs) or production data structures (PDSs) to use (technology mix) The dates and times for production, transportation, procurement, storage, and delivery Which locations to transport from and to (for example, production plant-> distribution center or distribution center -> customer)

The SNP optimizer bases its decisions about sources of supply on costs. The optimizer uses the following as possible sources:
Transportation lanes PPMs/PDSs

Moreover, you can define that the SNP optimizer is to taken into account incoming, time-dependent quota arrangements. You define penalty costs for the violation of quota arrangement values that the optimizer also takes into account during source of supply determination. For more information, see Quota Arrangements. Consideration of Incoming

The main purpose of optimized source determination using the SNP optimizer is to define the production locations in such a way as to reduce the number of stock transfers and associated stock transfer costs.

Constraints
The optimizer does not take into account external procurement relationships as sources of supply; that is, no scheduling agreements, contracts, nor purchasing info records. If you have assigned a means of transport to the transportation lane generated from the external procurement relationship, the optimizer takes this transportation lane into account. However, the optimizer does not create any orders for scheduling agreements or contracts during planning (it only takes into account existing orders as fixed orders).

Prerequisites
The prerequisites for source determination are the same as those for general optimization-based planning:
Set Up of Planning Area Set up of Master Data for the Optimizer Creation of Model Name and Version Set Up of Supply Chain Model Release of Demand Plan to Supply Network Planning

Using Costs to Control Source Determination


Since the SNP optimizer simultaneously takes into account all the conditions of a model to determine an optimal (most cost-effective) solution, it is generally only possible to influence its choice of sources by using costs. For example, you can use costs to prioritize sources by reducing the production costs at your preferred location. However, remember that the optimizer always takes all influencing factors into account:
Using Production Costs to Prioritize Production Resources

You can influence the optimizers decision regarding which location and resources to use for production by defining corresponding production costs in the PPM/PDS. For example, if you want to define priorities for three different PPMs/PDSs, you can specify the lowest production costs for your highest priority PPM/PDS, higher costs for the PPM/PDS with medium priority, and the highest

costs for the PPM/PDS with lowest priority. To do this, define single-level production costs or a cost function in the PPM/PDS. Note however that in addition to taking into account production costs when making its decision, the optimizer considers the costs for storing the PPM/PDS products and the available capacity of the resources required for the PPM/PDS.
Using Transportation Costs to Prioritize the Procurement Location

You can influence the optimizers decision regarding which locations to procure from, by defining corresponding costs in the transportation lane. For example, if you want to define the priorities of two different procurement locations, enter lower transportation costs for the transportation lane of your preferred location than those for the other transportation lane. Transportation costs consist of the means of transport costs (costs from the Means of Transport section of the transportation lane) and the product-specific means of transport costs (from the Product-Specific Means of Transport section). Note however that in addition to taking into account transportation costs when making its decision, the optimizer also considers other influencing factors, such as the storage costs and production costs of the location.

System Action if Source Cannot Be Found


If there is no valid transportation lane for procurement type F (external procurement), the system creates an SNP stock transfer with no reference to a source of supply. If there is no valid PPM/PDS for procurement type E (in-house production), the systems behavior is governed by whether or not the SNP: No Planned Order indicator has been set in the planning version. If this indicator is set, the SNP optimizer does not create any planned orders; if it is not set, the SNP optimizer creates planned orders with no reference to a PPM/PDS.

See also:
Optimization-Based Planning Production Data Structure in SNP

Consideration of Incoming Quota Arrangements


Use
You can define that the system considers incoming, time-dependent quota arrangements that you have defined in the master data for optimization-based planning in Supply Network Planning (SNP). The consideration of quota arrangements is valid for the following receipt types:
In-house production

External procurement Stock transfers from other locations

You can define penalty costs for cases where the SNP optimizer exceeds or falls short of the quota arrangements. The SNP optimizer takes these costs into account in addition to the other costs that are relevant to source determination. For more information, see Source Determination.

Prerequisites
In the SNP optimizer profile on the General Constraints tab page, you have set the Consider Quota Arrangements indicator. By default, the indicator is not set.

Features
Time-Dependent Quota Arrangements
The SNP optimizer takes into account incoming quota arrangements that you have defined in the quota arrangement master data. You create the quota arrangements in a time-dependent way, in other words, for a particular validity period that you have also specified in the quota arrangement master data. The validity period does not have to agree with the periods in the planning buckets profile. In the SNP optimizer profile, you can define how the SNP optimizer proceeds if multiple quota arrangements exist for a certain period. You can use the Multiple Quota Arrangements in Bucket indicator on the General Constraints tab page to define that the optimizer considers the first or the last quota arrangement in a period. The optimizer ignores the remaining quota arrangements within the period.

Quota Arrangements for Products and Product Groups


You can specify in the quota arrangement master data whether the quota arrangements are to be valid for a product or a product group. In this case, the quota arrangement refers to the total receipts of the corresponding product group. If you want to define the quota arrangements for product groups, you must specify product groups and product group types, which you have already defined in Customizing for the master data under Product Product Groups, in the product master data on the Properties 2 tab page. All the products in the product group must have the same base unit of measure.

Incomplete Quota Arrangements You do not have to define quota arrangements for all sources of supply. In the SNP optimizer profile on the General Constraints tab page, you can define how the SNP optimizer proceeds if a quota arrangement has not been defined for a possible source of supply. You have the following options:
Treat as Zero: The optimizer does not plan any procurement from sources of supply for which no quota arrangements have been defined. Ignore: The optimizer plans procurement from all sources of supply that come into question. Quota arrangements are taken into account for the sources of supply for which they were defined.

Penalty Costs for Quota Arrangement Violations Quota arrangement values are soft constraints for the SNP optimizer that the system can violate in return for incurring penalty costs. You can define these

penalty costs for exceeding or falling short of the quota arrangement value in the quota arrangement master data. If you set the penalty costs suitably high, the system will try to adhere to the quota arrangements (since the optimizer always tries to find the solution with the lowest costs). Creating and Changing Quota Arrangements The SNP optimizer can also create quota arrangements for subsequent optimizationbased or heuristic-based planning runs. For example, after a longer term optimization-based planning (monthly, for instance), you can perform shorter term heuristic planning runs using the quota arrangements created in the optimization planning run as the basis for the heuristic planning runs. To do this, set the Modify quota arrangements indicator when you run the optimizer in the background (see also the F1 help).

If you set the Modify quota arrangements indicator, the optimizer might overwrite quota arrangements that you created previously. Moreover, you still have to define penalty costs for the quota arrangements created by the optimizer so that the system can take them into account in the next optimization run.

Activities
You run the SNP optimizer interactively or in the background. For more information, see Running the Optimizer from the Interactive Planning Desktop and Running the Optimizer in the Background. During source determination, the system considers the penalty costs that you have assigned to potential quota arrangement violations.

Lot Size Planning


Purpose
You use lot size planning to specify which demand quantities are to be made available in which buckets (periods). You can choose to do one of the following:
To procure or produce the exact demand quantities of a product. The order size corresponds to the demand quantity.

The main advantage of this method is the low storage costs. Its disadvantages include high costs for procurement and setup.
To group several product demand quantities from consecutive buckets into larger procurement lots or production lots. With this method, procurement or production is done in advance and you can make use of the economy of scale cost savings.

The advantages of this method include low procurement and setup costs. Its main disadvantage is the high storage costs.

The SNP optimizer uses all the costs to determine the optimal (most cost-effective) procurement lot sizes, production lot sizes, and transportation lot sizes. For finite capacity planning with the SNP optimizer, both costs and available capacities are relevant for lot size planning. Increased setup consumption and/or higher setup costs can be taken into account during planning or rough-cut planning in Supply Network Planning (SNP) for integration with the subsequent Production Planning and Detailed Scheduling (for example, SAP APO Production Planning and Detailed Scheduling, PP/DS). This makes it easier for Production Planning and Detailed Scheduling to create feasible plans.

Prerequisites
The prerequisites for lot size planning are the same as those for general optimization-based planning:
Planning Area Administration Configuring Master Data for the Optimizer Model/Version Creation Supply Chain Model Setup Release of the Demand Plan to Supply Network Planning

Lot Size Planning for Production


When using the SNP optimizer for lot size planning in production, you can model both setup consumption and setup costs in the system. You can also influence lot size planning by defining minimum lot sizes, maximum lot sizes, and discrete (integer value) lot sizes. Setup Consumption You can choose any of the following three options for modeling setup consumption in the system:
...

1. If the past setup consumption amount per bucket is known to you, you can model setup consumption by reducing the available capacity of the production resource accordingly. If the setup consumption remains the same across all buckets, you can reduce the rate of the resource utilization in resource master data. For example, for a setup consumption of 20%, enter a bucket capacity utilization rate of 80%.

If setup consumption varies across the different buckets, you can reduce the standard capacity for individual buckets accordingly. In this instance, you can choose the linear optimization method for the optimization run, meaning that discretization is not required.
2. If the setup consumption level is not known but setup consumption is relatively low in comparison to bucket capacity, you can define setup consumption in the PPM as a fixed bucket resource consumption.

In order for the optimizer to be able to take into account the fixed resource consumption defined in the PPM, you must define a discretization horizon in the

Fixed Material and Resource Consumption field of the SNP optimizer profile. You also have to choose the discrete optimization method in this profile.
3. If the setup consumption level is not known and setup consumption is relatively high in comparison to bucket capacity, you can run cross-period lot size planning. For more information, see Cross-Period Lot Size Planning.

Setup Costs The optimizer primarily uses setup and storage costs as a basis for determining optimal lot sizes and lot numbers. If setup costs are high and storage costs low, the optimizer is most likely to plan large lots whereas if setup costs are low and storage costs high, it will plan small lots. You can define the setup costs as fixed costs within the PPM cost function (choose the Maintenance pushbutton near the Cost Profile field and enter the setup costs in the Fixed costs field). You must also choose the discrete optimization method in the SNP optimizer profile and enter a discretization horizon in the PPM Execution field within the Discrete Constraints tab. If you want to perform sequence-dependent lot-size planning, the optimizer takes into account setup transitions, setup costs, and setup times that you have defined in a setup matrix. This allows you to optimize your setup costs. For more information, see Sequence-Dependent Lot-Size Planning. Integration If you have integrated SNP and PP/DS planning (the SNP PPM and PP/DS PPM are linked), the optimizer takes into account setup statuses from PP/DS. This means that the optimizer does not take into account setup consumption and setup costs if a PP/DS order for the associated PP/DS PPM already exists in the corresponding bucket. If you want to have this integration, you must set the Cross-Period Lot Size Planning indicator (for Cross-Period Lot Size Planning) or the Lot Size Planning: Not Cross-Period indicator (if your lot size planning is not cross-period) on the Integration tab page in the SNP optimizer profile. Minimum and Maximum Lot Sizes If, due to technical constraints for instance, a minimum or maximum lot size is required for your production (for example, at least one entire tank of active ingredient must be produced), you can define minimum and maximum lot sizes. You can choose one of the following two options for defining these minimum and maximum lot sizes:
...

1. You define the minimum and maximum lot size in the PPM. 2. You define the minimum lot size on the Lot Size tab page in location product master data in conjunction with the Fixed Lot Size or Lot-for-Lot lot-sizing procedure. The SNP optimizer takes these settings into account for integration purposes (with PP/DS, for example). The minimum lot size defined in the product master applies to all the PPMs that use this product as the header material. If the minimum lot size in the product master is larger than the minimum lot size in the

PPM, the optimizer takes into account the value from the product master. The maximum lot size defined in the product master has no relevance for the SNP optimizer.

Fixed lot size: The SNP optimizer considers the value you specified for the fixed lot size as the minimum lot size. Per PPM execution, the PPM output quantity (the output component quantity) is the same as this fixed lot size. Lot-for-lot: The optimizer takes into account the minimum lot size defined in the location product master as the minimum lot size.

In order for the SNP optimizer to be able to take into account the minimum lot sizes defined in the PPM or location product master, you must also choose the discrete optimization method in the SNP optimizer profile and enter a discretization horizon in the Minimum PPM Lot Size field within the Discrete Constraints tab. The optimizer also takes into account the maximum PPM lot size defined in the PPM when the linear optimization method has been chosen. For this, you must set the Maximum PPM Lot Size indicator from the General Constraints tab of the SNP optimizer profile. Discrete (Integer Value) Lot Sizes If, due to technical constraints for instance, you can only produce integer multiples of a lot (for example, you can only produce entire tanks of active ingredient and not 1.5 tanks), you can set the Discretization indicator in the PPM. In order for the optimizer to be able to consider this indicator, you must also choose the discrete optimization method in the SNP optimizer profile and enter a discretization horizon in the Integral PPMs field within the Discrete Constraints tab. If you do this, the optimizer always plans production in integer multiples of the output component quantity. Defining a fixed lot size or lot-for-lot in the Lot Size tab of the location product master data for integration reasons (with PP/DS, for instance) has the following implications:
Fixed lot size: Per PPM execution, the SNP optimizer always sets the output quantity in the PPM to the value you entered for the fixed lot size. Lot-for-lot: Every time the PPM is executed, the SNP optimizer sets the output quantity in the PPM to the value you entered in the Rounding Value field (on the Lot Size tab page) of the location product master.

The quantity of input components and amount of resource consumption are adjusted accordingly. Since you can also use the lot sizes defined in the location product master when creating PP/DS orders, you can plan with greater precision.

Lot Size Planning for Transportation


Fixed Means of Transport Costs As with setup costs for production, the SNP optimizer primarily uses fixed means of transport costs as a basis for determining optimal transportation lot sizes. If these costs are high, the optimizer is most likely to plan larger transportation lots (meaning less shipments; once every two weeks, for example).

You can define these fixed means of transport costs in the Means of Transport section of the transportation lane. In the CostFunctn field, specify a transportation cost function, for which you have defined fixed costs. You must also choose the discrete optimization method in the SNP optimizer profile and enter a discretization horizon in the Means of Transport field within the Discrete Constraints tab. Minimum and Maximum Lot Sizes You can define minimum and maximum lot sizes for transportation in the SNP lot size profile (transportation lanes). You then specify this lot size profile for a particular product in the Product-Specific Means of Transport section of the transportation lane. You can thus define minimum and maximum transportation lot sizes for specific products. In order for the optimizer to be able to consider the defined minimum lot size, you must choose the discrete optimization method in the SNP optimizer profile and enter a discretization horizon in the Minimum Transport Lot Size field within the Discrete Constraints tab. If you set the Maximum Transportation Lot Size indicator of the General Constraints tab page in the SNP optimizer profile, the SNP optimizer also takes the maximum transportation lot size into account when the linear optimization method is chosen. Discrete (Integer Value) Transportation Lots and Means of Transport If you only want to transport integer multiples of a transport lot size (entire pallets of a product only, for example), you can define that you want the optimizer to take this into account during planning, by choosing the discrete optimization method in the SNP optimizer profile and by entering a discretization horizon in the Integral Transport Lots field of the Discrete Constraints tab. You usually define the transportation lot size as a rounding value in the SNP lot size profile (transportation lanes). Alternatively however, you can set in the Maintain Global SNP Settings activity in Customizing for SNP that the optimizer is to use the rounding value defined in the destination locations location product master as the transportation lot size. Similarly, you can define that you want the optimizer to plan means of transport only in integer values, by only scheduling whole trucks for a shipment, for example. To do this, enter a discretization horizon in the Integral Means of Transport field.

Lot Size Planning for Procurement


Fixed Procurement Costs As with setup costs for production and fixed means of transport costs for transportation, the SNP optimizer primarily uses fixed procurement costs as a basis for determining optimal lot sizes for procurement. If these costs are high, the optimizer is most likely to plan large procurement lots (meaning less procurement operations; once every two weeks, for example).

You can define these fixed procurement costs on the Procurement tab page of the location product master. In the Cost function field, specify a procurement cost function, for which you have defined fixed costs. You must also choose the discrete optimization method in the SNP optimizer profile and enter a discretization horizon in the Procurement Quantity field on the Discrete Constraints tab page. Minimum, Maximum, and Integral Lot Sizes At present, the SNP optimizer cannot take into account minimum, maximum, and integer value procurement lot sizes during lot size planning. However, there is a workaround for modeling these lot size constraints:
...

1. First create your supplier as a location in your model 2. Create a transportation lane between the supplier and the demand location 3. You can now model the procurement lot size constraints as transportation lot size constraints (see the section on Lot Size Planning for Transportation)

See also:
For more information about optimization-based planning and its execution, see:
Optimization-Based Planning Running the Optimizer in the Background Running the Optimizer from the Interactive Planning Desktop Definition of Time-Based Constraints in Interactive Planning

Stock Planning
Purpose
Companies have stock on hand to safeguard against uncertainties and fluctuations in demand. However, holding an excessive amount of stock ties up too much capital and generates high storage costs. If there is insufficient on-hand stock, there is a danger that unexpected demand might arise that cannot be fulfilled. Therefore, the SNP optimizers main purpose in stock planning is to keep the onhand stock between specific upper and lower bounds.

Prerequisites
The prerequisites for stock planning using the SNP optimizer are the same as those for general optimization-based planning:
Set Up of Planning Area Set up of Master Data for the Optimizer Creation of Model Name and Version Set Up of Supply Chain Model Release of Demand Plan to Supply Network Planning

Integration
When planning the on-hand stock, the SNP optimizer takes into account goods receipts and issues that were caused by other system application areas (PP/DS, deployment, or Transport Load Builder, for example) or fixed SNP orders. If these orders involve goods issues that cannot be balanced by the optimizer within the relevant bucket (period), the optimizer has an infeasible problem. To avoid this, you can specify in the SNP optimizer profile (in the Integration tab) that goods issues caused by stock transfers or planned orders are to be treated the same as the customer demand, demand forecast, or corrected demand forecast, meaning that these demands do not have to be fulfilled. In the product master on the SNP1 tab page, you define penalty costs for non-fulfillment of these demands, which the SNP optimizer takes into account. This makes the problem feasible for the optimizer. However, the solution provided may contain shortfall quantities.

Storage costs
First, you can set for the storage cost calculation whether you want the SNP optimizer to interpret the on-hand stock per bucket as the average stock on hand per bucket or as the stock on hand at the end of the bucket:

Average stock on hand: The optimizer calculates the storage costs by multiplying together the on-hand stock, the storage costs defined in the location product master (see below), and the number of days in the bucket. This option is most appropriate when receipts and issues are evenly distributed over a bucket.

Stock on hand at end of period: The optimizer calculates the storage costs by multiplying the stock on hand with the storage costs defined in the location product master. This option is most appropriate when receipts and issues are unevenly distributed over a bucket.

You define storage costs for a specific product at a specific location in the Prod. Storage Costs field on the Procurement tab page of location product master data. You should always define storage costs since this is how you ensure that the SNP optimizer does not plan any unnecessary production. Using storage costs helps you to ensure that production, procurement, and transportation always match demand as near to the time as possible. Since storage costs are defined on a product-specific basis, you can use them to control where (in which locations) a product is stored. Storage costs are independent of storage resource consumption, which means you can define storage costs without creating a corresponding storage resource.

Adhering to a Lower Bound for Stock


Safety Stock Planning
The SNP optimizer decides whether safety stock is to be created for a product in specific locations, and if so, how it is to be created. You have to provide the optimizer with the information about the level of safety stock that is required. You can either enter this level directly in the location product master based on past

experience or use extended safety stock planning to allow the system to determine it. The optimizer automatically includes the results of extended safety stock planning in a key figure. For more information, see Safety Stock Planning. The optimizer considers safety stock as a soft constraint that can be violated with incurring penalty costs. In order for the optimizer to take safety stock into account, you have to either define penalty costs for violating safety stock in the Safety Stock Penalty field on the Procurement tab page of the location product master, or define them as a time-based key figure in interactive planning (planning book 9ATSOPT for instance); see also Definition of Time-Based Constraints in Interactive Planning. These costs must be higher than the storage costs. If not, the optimizer would never plan safety stock.

In the SNP optimizer profile (on the General Constraints tab page), you can define whether you want the optimizer to take into account safety stock at all, and if so, whether you want it to use the absolute deviation value or the relative deviation value when calculating the penalty costs for falling below the safety stock level. For absolute deviation, the optimizer multiplies the absolute value fallen below with the penalty costs defined in the product master (per day). For relative deviation, the optimizer multiplies the percentage fallen below with the penalty costs defined in the product master (per day).
The safety stock level is not permitted to exceed the product-specific upper bound for storage defined in the location product master (the Maximum Stock Level field of the Lot Size tab page).

Days Supply Planning You can also use safety stock for static days supply planning with the SNP optimizer. When using static days supply planning, it should be ensured that there is at all times at least as much on-hand stock of a product as is required within the days supply horizon. To do this, define a safety stock method for the appropriate product on the Lot Size tab page in the location product master (SZ, MZ, SM, or MM) and enter either a safety days supply that is not period-dependent in the location product master or a safety days supply that is period-dependent in the interactive planning table. Note that for safety stock methods SM and MM, the SNP optimizer only considers independent requirements as well as dependent and distributed demands caused by fixed orders, since these demands and the demand locations are already known before the optimization run. The optimizer uses the days supply planning results as a basis for creating the safety stock.

Adhering to an Upper Bound for Stock


Static Upper Bound for Stock You can define a product-specific stock upper bound for a location product in the location product master data. To do this, enter a value in the Maximum Stock Level field of the Lot Size tab page. The SNP optimizer takes this upper bound into account when planning if you set the Maximum Product-Specific Quantity Stored indicator of the General Constraints tab page in the SNP optimizer profile. The optimizer considers the

upper bound for stock as a soft constraint, meaning that it can be violated subject to the calculation of penalty costs. These penalty costs are assigned by the optimizer, which means that you cannot set them in master data. You can also define a time-based upper bound for stock in interactive Supply Network Planning. For more information about this, see Definition of Time-Based Constraints in Interactive Planning. You can specify a multi-product stock upper bound by defining the available capacity of a storage resource in the resource master data. The SNP optimizer takes this upper bound into account when planning if you set the Storage Capacity indicator on the General Constraints tab page in the SNP optimizer profile (see also, Finite Capacity Planning). Dynamic Upper Bound for Stock You can use the shelf life functionality to define a dynamic stock upper bound for optimization-based planning. In product master data, if you set the Plng with Shelf Life indicator of the Attributes tab page and enter a horizon in the associated Shelf Life field, the optimizer ensures when planning that at no time is there more stock on hand than required in the specified horizon. For example, if you enter a shelf life horizon of a week, you are specifying that you do not want any goods receipts to be planned for the demand that exists in the week before this horizon, which means that no stock should be kept on hand for longer than a week prior to the demand. In order for the SNP optimizer to be able to take into account the products shelf life that you defined in the product master, you must set shelf life as a soft constraint in the SNP optimizer profile. To do this, go to the General Constraints tab and select the Continue Using Expired Product radio button. The optimizer then plans to continue using products that have passed their expiration date, but calculates penalty costs for doing so. We also recommend that you set the Product-Indep. Key figure Use Penalty Costs. If you do this, the optimizer does not use the procurement costs of the location product to calculate penalty costs (the default setting) but instead uses penalty costs that are not product-dependent, which you set yourself in the accompanying field.

Product Shelf Life


The SNP optimizer can also take into account the shelf life of a product but in a restricted way. At no point in time does it try to plan more on-hand stock of this product than is required in the corresponding bucket. However, if a larger product quantity has to be stored than the quantity to be used in the bucket, the optimizer considers the surplus as quantities that are to be disposed of as waste and calculates corresponding penalty costs.

For this, first set the Plng with Shelf Life indicator of the Attributes tab page in the product master data (as previously mentioned) and enter a horizon in the associated Shelf Life field. Then, in the SNP optimizer profile, define shelf life as a hard constraint by selecting the Dispose of Expired Product radio button on the General Constraints tab page.We do not recommend that you set the Product-Indep. Key figure Use Penalty Costs. In this case, the optimizer calculates the costs for procuring the location product (defined in the product master) as penalty costs. Constraints
When creating orders at the end of the optimization run, the system does not distinguish between the quantities the optimizer considers as waste and the other planned quantities. This means that the sum from both quantities is displayed as the planning results (in interactive planning, for example). The product shelf life defined in the product master data is not passed onto all the manufacturing levels, which means for instance that the shelf life of an input component has no effect on the shelf life of an output component. For example, if you define the shelf life of an active ingredient, the system does not transfer this shelf life to the subsequent pills containing this ingredient or their packaging. As with production, the product shelf life defined in the product master is not passed onto multiple locations during transportation. This means that if a product is transported from one location to another, the shelf life horizon starts anew.

The consequence of this is that when there are cycles in the distribution network (transporting a product from one location through another and then back to the start location), products lose their shelf life upon return arrival. In this instance, the optimizer would be able to continue using a product that, in fact, needed disposing as waste.

See also:
For more information about optimization-based planning and its execution, see:
Optimization-Based Planning Execute Optimizer in the Background Execute Optimizer in Interactive Planning

Optimization Profiles
Use
The following table describes the profiles used by the SNP optimizer. To access each profile individually, choose Supply Network Planning Environment Current Settings Profiles from the SAP Easy Access screen. You can also define the profiles in the Customizing for Supply Network Planning (SNP). For more information, see the Implementation Guide (IMG) or the field-level help (F1 help).

Profile
SNP optimizer profile

Used in Optimization Planning Run


In this profile, you choose which optimization method you want to use during the optimization run (linear optimization or discrete optimization) and which constraints you want the system to take into account. In this profile, you assign a weighting to different cost elements in the objective function (thus determining how the costs relate to one another). We recommend that you only change the standard settings for test purposes when modeling. To avoid undesired side-effects, you should not change the default setting of 1.0 in the production system if possible. This setting corresponds to the costs entered in cost maintenance. In this profile, you define minimum and maximum lot sizes for the shipment. You then specify this profile for one specific product in the Product-Specific Means of Transport section of the transportation lane. You can thus define minimum and maximum transportation lot sizes for specific products. If you wish to make shipments in integer multiples of a transportation lot size only, you can also define the transportation lot size as a rounding value in this profile. To enable the optimizer to take into account the minimum lot sizes and rounding values defined, you have to choose the discrete optimization method in the SNP optimizer profile. If you want to perform a new planning run after an SNP optimizer planning run, you use this profile to improve planning stability by restricting possible decision variable deviations from the previous optimization plan. For example, you can permit smaller deviations at the start of the planning horizon and then increase these towards the end of the horizon to avoid too many last-minute planning changes. Your new plan does not have to be based on the directly preceding optimization run, you can also choose earlier runs. You use this profile to define that certain customer demands are to be prioritized during optimization. For more information, see Prioritization of Customer Demands and Demands with High Volume. You can use the SNP priority profile to define priorities for product decomposition and resource decomposition , that is, you can change the sequence in which the optimizer groups and plans products and resources in partial problems. For more information, see Decomposition. In this profile, you can make basic settings for the various SNP planning procedures, such as heuristic, optimizer, deployment heuristic, deployment optimizer, and Transport Load Builder (TLB). The SNP planning profile that you activate in the SNP Customizing under Maintain Global SNP Settings applies globally for all SNP planning procedures. For some planning procedures, you can overwrite the settings of the active profile by entering another SNP planning profile during execution of planning in the background. You use this profile to define how background jobs are divided in parallel processes. You can specify the number of concurrent parallel processes, the number of objects per processing block, and the server

SNP cost profile

SNP lot size profile (transportation lanes)

SNP optimization bound profile

SNP penalty cost group profile SNP priority profile

SNP planning profile

Parallel processing profile

Profile

Used in Optimization Planning Run


group. In each case, you define the profile for one specific application function, such as the SNP optimizer.

You can also maintain the SNP optimizer profile, the SNP cost profile, and the SNP optimization bound profile in the interactive planning desktop of Supply Network Planning.

Decomposition
Use
Using the decomposition methods can reduce optimization runtime and memory requirements in Supply Network Planning (SNP). Decomposition may also represent the only way for the SNP optimizer to find a feasible solution in the event of large discrete problems. Decomposition is a flexible tool for balancing the tradeoff between optimization quality and required runtime. When runtime is unrestricted, the SNP optimizer usually provides a better (optimal) solution without decomposition; however, when a fixed runtime has been specified, using decomposition could assist the optimizer to find a better or, in fact, feasible solution.

Features
Decomposition Methods The following decomposition methods are available: Time decomposition, product decomposition, and resource decomposition. You can use time decomposition as well as product decomposition in conjunction with the linear and discrete optimization methods. It is only advisable to use resource decomposition in conjunction with discrete optimization.
Time decomposition speeds up the solution process by dividing the source problem into a series of partial problems. The system then solves these partial problems sequentially. Product decomposition speeds up the solution process by forming product groups. The system solves the complete model for one product group at a time according to the window size selected. The rule of thumb is as follows: The smaller the window size, the less time it will take the system to find a solution, but the larger the window size, the better the quality of the solution found. Resource decomposition speeds up the solution process by analyzing the material flow and basic optimizer decisions about production, procurement, and transportation to determine a resource sequence. The optimizer can then create sub-problems for the individual resources, which are solved in sequence. The optimizer makes decisions in every sub-problem that cause the resource to be loaded.

It is particularly advisable to use resource decomposition if the production processes always load the resources in a similar sequence. Resource decomposition does not reduce memory requirements. If you would like to

reduce memory requirements, you could use time decomposition alongside this decomposition method. You cannot use resource decomposition in conjunction with strict prioritization If you want to use product and resource decomposition together, the system carries out the resource decomposition first. The product decomposition then tries to improve upon the results of the resource decomposition. SNP Priority Profile You can use the SNP priority profile to define priorities for product and resource decomposition, that is, you can change the sequence in which the optimizer groups and plans products and resources in partial problems. For product decomposition, the sequence of planning is normally based on the costs for non-delivery and the total demand quantity of the product. You can use the priority profile to assign priorities for important products and, thus, control the sequence for planning. The following rules apply:
The system groups the products into partial problems according to their priorities and their dependencies defined in the bill of materials. If a partial problem contains products with different priorities, due to product dependencies, the partial problem takes on the priority of the product with the highest priority (that is, the priority with the lowest number). The system plans partial problems with different priorities separately, so no overlapping occurs. If many products have the same or no priority, division into partial problems and the sequence of planning are also based on the costs of non-delivery and the product quantity.

For product decomposition, you can also control division into partial problems using window size, which you can specify for the decomposition methods in the SNP optimizer profile. If you select a small window size, the optimizer plans products with the same priority separately, since the partial problems are very small (0% = separate planning). If you select a larger window size, the optimizer plans products with the same priority together in one partial problem (99% = planning together in one partial problem). Note that, due to prioritization, the optimizer no longer exclusively considers the defined costs when covering demand. Instead, the system plans the products with the highest priority first. The system only considers costs when solving the individual partial problems. For resource decomposition, the planning sequence is generally predetermined by the production process models (PPMs) or production data structures (PDSs). If the sequence is not clear, or if you want another sequence, you can change it by assigning priorities to resources. In this way, you can reverse the standard order that the system uses to plan the assembly and then the end products, or you can plan important resources that must be utilized for cost reasons first.

Activities
...

1. You specify a decomposition method in the SNP optimizer profile. To do this, select SNP Optimizer Profile in the SNP Customizing or in the current settings, and then select the Solution Methods tab page. 2. If necessary, specify a priority profile in the current settings of SNP, under Define SNP Priority Profiles, and assign it to the decomposition methods on the Solution Methods tab page.

Configuring Master Data for the Optimizer


Purpose
This section lists all the master data that must be created to successfully run the optimizer in Supply Network Planning. It also lists all the required entry fields and other data that the optimizer takes into account. Use this information as a checklist before you run the optimizer to make sure you have maintained all the master data for your supply chain model.

For detailed information, see the field-level help (F1 help). For more information, see the SAP APO master data documentation. If you want to work with local time zones, you have to set the Local Time Zone indicator in Model and Version Management. If you do not set this indicator, we recommend that you use the UTC time zone. When using local time zones, we also recommend that you use the same time zone for both the location and the planning calendar or for the location and the resource.

Process
...

1.

You create locations (that are not product-dependent).


1.

Location type Storage resource Handling resource Calendar Time zone


...

2.

You create products. Field Base Unit of Measure Gross Weight and Unit Volume and Unit Shelf Life

Tab Page/Screen Header data Attributes

Units of Measure

Define a conversion from the volume unit into the base unit of measure (based on the unit of measure of the planning area)

SNP 1

For customer demand, demand forecast, and the corrected demand forecast. Location-dependent penalty costs are also available. No delivery penalty Delay penalty Maximum lateness SNP production horizon SNP stock transfer horizon SNP forecast horizon The first two horizons are also relevant if you are using Production Planning and Detailed Scheduling (PP/DS). You can specify in the SNP optimizer profile on the Integration tab page whether the horizons are to be taken into account or not.

SNP 2

Procurement

Procurement type Planned delivery time (with external procurement) Cost function (with external procurement) Procurement costs Production storage costs Penalty costs for shortfall of safety stock Handling capacity consumption - if not specified, the optimizer uses the Volumespecified on the Attributes tab page as the default value. Storage consumption - if not specified, the optimizer uses the Volume specified on theAttributes tab page as the default value.

GR/GI

3.

You create resources. You have the option of creating the following resource types for Supply Network Planning:

Single-mixed resource Multimixed resource Bucket resources Transportation resource

Use single-mixed resources or multimixed resources if the resources are to be used for both Supply Network Planning and Production Planning and Detailed Scheduling (PP/DS). A bucket resource can only be used for SNP. We recommend that you create mixed resources if possible. Note however that bucket-oriented block planning is possible in PP/DS in conjunction with SNP only if you are using different resources for block planning in PP/DS and Supply Network Planning. You ensure this by setting the Not SNP-Relevnt indicator for the resource used in PP/DS.

To create transportation resources, use the same procedure as for creating bucket resources. For more information about creating resources, see the resource section in the SAP APO master data documentation. Below is a list of the data that must be defined for optimization-based planning in SNP. Single-Mixed Resources/Multimixed Resources Tab Page/Screen Standard Capacity Field You must define the available bucket capacity: Buckets If you choose Buckets from Conti., the PP/DS available capacity is used to generate the available bucket. You can also define a loss factor (for maintenance or setup times, for example,) here. If you choose Maintain Buckets, you must enter the following additional data: Period type Number of periods Bucket capacity Utilization rate for bucket-oriented capacity (%) You can use the Available Bucket Capacity button to display the defined available bucket capacity for the individual buckets. You can also still define an available capacity profile and capacity variants, and change the periodicity and capacity of individual buckets. For more information about this, see the SAP APO master data documentation. You can define costs for the SNP optimizer in the capacity profile or in the quantity/rate definition for the individual capacity variants (for details, see theCapacity variants button section below). Cross-period lot sizes (only valid for single-mixed resources!) - set this indicator if you want to run SNP optimizer cross-period lot size planning on this resource.

Planning Parameters

Bucket Resources Tab Page/Screen Field

General Data

Resource Resource category Location when you define a location, the system refers to the time zone from the location master data, otherwise you have to enter the time zone. Time zone Planner Factory calendar Active variant information about the active variant of a resource is required forliveCache purposes only. If you have defined multiple capacity variants, you should specify the maximum capacity variant as the active variant or, if this has not been defined, the normal capacity variant. During the capacity check in interactive planning, the system considers the active variant. For more information, see the explanation of theCapacity Variants button. Day -/Day + - The resource capacitys validity period Capacity overload (%) Minimum load (%) Cross-period lot size planning - Activate this indicator if you want to run an SNP optimizer cross-period lot size planning on this resource. Period type Number of periods Bucket capacity Utilization rate for bucket-oriented capacity (%) Capacity variant Valid from/to Capacity utilization Qty/rate definition

Planning Parameters

Standard Capacity

Capacity Variants Button

You can define multiple capacity variants and use a status indicator to label the available capacity of this variant as normal capacity, maximum capacity, or minimum capacity. You can define costs for using the normal or maximum capacity and for falling below the minimum capacity in the quantity/rate definition or the capacity profile of the resource. The SNP optimizer then takes these costs into account during planning. However, the SNP optimizer only takes into account the minimum available capacity and the costs you defined for a capacity variant with the statusNormal Capacity for production resources. You define the status indicator globally for all resources that have been assigned with the capacity variant. From the resource initial screen, choose Current Settings Capacity Variants. The default value is a maximum capacity (blank field). If you have defined multiple capacity variants with the same status, the system uses the smallest numbered variant. We recommend that on the General Data tab page you always define the maximum capacity variant as the active variant or, if this has not been defined, the normal capacity variant. The system includes the default available capacity for periods for which you have not created a capacity variant. If the normal capacity is below the minimum capacity, the system uses the normal capacity as the minimum capacity. If the normal capacity exceeds the maximum capacity, the system uses the normal capacity as the maximum capacity. The SNP optimizer does not consider theWorkdays field for planning. The optimizer considers the entries within this field when calculating the available capacity of the capacity variant but always uses the factory calendar for planning.

Definitions Button - the Quantities/Rates Tab Page

You use the Qty/Rate Definition to define the available capacity for the capacity variant. Qty/rate definition (name) Valid to Planner Number of periods Period type Bucket capacity Unit Costs You define costs for falling below a minimum capacity or for using a normal or maximum capacity (you define costs for a capacity variant that you assign with statusMinimum Capacity, Normal Capacity, or blank ( = maximum capacity). For more information, see the Capacity Variants Button section above. The optimizer only takes into account costs you define for a capacity variant with status Normal Capacity if the resource is a production resource.)

4. 5.

You assign resources to locations in the location master data. You create PPMs. Field Plan number Use of a plan: S (for SNP) Description of PPM Single level costs Cost function (cost profile) Operation Description (of operation)

Tab Page/Screen Initial screen Operations

Activities

In Supply Network Planning, each activity must be at least one day long or a multiple of one day.Each operation can also contain only one activity. Activity number Description (of activity) Activity category Scrap %

Components

Product Input/output indicator From date To date Unit of measurement Material consumption (variable) Time-dependent data Mode - you can specify only one mode per activity Unit of measure (must be Day) Duration (fixed) Primary resource (required only if resources are connected to this PPM) Location (required only if resources are connected to this PPM) Resource consumption (rate) and unit (required only if resources are connected to this PPM) Resource (can enter several, but required only if resources are connected to this PPM) Unit of measure (required only if resources are connected to this PPM) Calendar resource (for the entire PPM) Variable and fixed bucket consumption (required only if resources are connected to this PPM) Time-dependent data Operation name Activity number PPM and description Validity (date/time) Location Discretization Bucket offset Minimum and maximum lot size

Modes

Resources

Activity relationships - Predecessor/successor Tab Pages Product plan assignment button

Results
After you have configured the master data, you must set up the supply chain model in the Supply Chain Engineer, including the creation and maintenance of transportation lanes, before you can perform any planning runs.

See also:
The SAP APO master data documentation

Supply Chain Model Setup

Running the Optimizer from the Interactive Planning Desktop


Use
The optimizer proposes a plan for multiple products simultaneously based on the minimum procurement costs, storage costs, transportation costs, and production costs without overloading resources.

Prerequisites
You have set up the planning area and planning book Master Data Setup for the Optimizer You have maintained optimization profiles Model/Version Creation Supply Chain Model Setup Release of the Demand Plan to SNP

Procedure
...

1. Select Advanced Planning and Optimization Supply Network Planning Planning Interactive Supply Network Planning from the SAP Easy Access screen. The Planning Book: SNP Interactive Planning / SNP Plan (Live) screen appears. 2. Choose to display the shuffler.You then choose the location products you want to be used in the optimization run from here. 3. From the dropdown box in the first sort statement (Show...), choose: APO location product. You can also choose specific location products to be used by choosing the icon to the right of this dropdown box. In addition, you can perform a consistency check for this data by choosing Check Entry. 4. If required, limit the range of location products to be planned by making selections from the dropdown boxes under the second sort statement (that fulfill the following conditions...).For example, you can choose different planning versions. 5. Choose . The location products are now displayed in the selector. 6. Double-click on a location product to display the current situation in the workspace to the right of the selector, or place your cursor on a location product and choose the Load data icon. 7. Select the location products to be planned. You can choose either all the location products displayed (choose Select all), or particular location products by placing your cursor on a location product, clicking and holding down the left mouse button while dragging the cursor until all desired

location products have been highlighted (alternatively, use the Shift and Arrow keys on your keyboard). 8. Choose Optimizer, to call the optimizer. The SNP Optimizer window appears.

The Optimizer icon is displayed on the interactive desktop automatically if you are using the standard SNP planning book SNP94. However, If you create your own planning books and wish to use the optimizer in interactive planning, you must specify that you want this icon to be displayed. You do this in the Design mode of the interactive planning desktop.
9. On the Optimization tab page in the SNP Optimizer window, you choose one of your predefined SNP optimizer profiles, cost profiles, optimization bound profiles, and penalty cost group profiles. By choosing the icons , , and , you branch to the maintenance screens for the profiles to make changes to existing profiles, for example. 10. Choose to start the optimization run.

The current solution resulting costs determined by the optimizer are displayed in the Current Solution area of the Optimization tab page. The individual steps of the optimization process are displayed in the Status area during the optimization run and information about intermediary solutions is displayed in the Solution Run area. In addition to this, messages about the current optimization run are displayed in the Messages area. You can also display the products that were selected for this optimization run by choosing . Choose to branch to the Supply Network Planning: Optimizer log file screen. From there, you can decide which type/form of log to display (the message log, input log, or results in a text file for example.)
11. Choose the Solutions tab page to view information about the previous optimization runs. If you select a solution in the right-hand screen area, the data corresponding to that solution appears in the left-hand area. 12. Choose the Messages tab page to view messages about the previous optimization runs. If you select an optimization run in the left-hand screen area, the messages corresponding to that optimization run appear in the right-hand area.

See also:
Application Logs for Optimizers

Definition of Time-Based Constraints in Interactive Planning


Use
A number of constraints are taken into account during the SNP optimization run, including capacity constraints that have been defined for resources. You usually use the SNP optimizer profile to specify which constraints you want the optimizer to consider during the optimization run. However, in certain circumstances, it might be necessary to define constraints that are time-based; for example, if a supplier

provides varying quantities of a product from bucket to bucket. You can define these time-based constraints in interactive planning. You can set the following bounds:
An upper bound for external procurement (at product-location level) An upper bound for stock on hand (at product-location level) An upper bound for production (at product-PPM/PDS level) An upper bound for transportation (at product-transportation lane level) An upper bound and a lower bound for total receipts (at product-location level)

Prerequisites
The following prerequisites must be met for considering time-based constraints:
You have not set the Ignore Time-Based Constraints indicator in the SNP optimizer profile. You use a SAP GUI as of version 7.10. In this case, you can see in interactive SNP planning whether or not you have entered 0 in a key figure. This is particularly useful for the receipt upper bound.

Features
Upper Bounds for External Procurement, Stock on Hand, Production, and Transportation
In the data view OPT_TSBD in the standard SNP planning book 9ATSOPT, there is a table in the lower part of the screen containing the four key figures Procurement Upper Bound, Stock Upper Bound, Production Upper Bound, and Transportation Upper Bound that you can use in addition to the standard functions of interactive SNP planning. You can define upper bounds for the individual key figures in specific periods. These upper bounds are then taken into account by the system when you perform an SNP optimization run. The three upper bounds for external procurement, production, and transportation are considered by the optimizer as pseudo-hard constraints. Pseudo-hard constraints can be violated but only by calculating infinitely high penalty costs, which means that the optimizer only violates this type of constraint if it cannot find any other feasible solution.

For external procurement, transportation, and production, you cannot define any time-based lower bounds because this could prevent the optimizer from finding a feasible solution.
In the SNP optimizer profile, you can specify whether you want the optimizer to consider the upper bounds for stock as a soft constraint or a pseudo-hard constraint (on the Extended Settings tab page, activate or deactivate the Consider Upper Bounds for Stock as a Soft Constraint indicator). The optimizer can violate soft constraints by calculating penalty costs. You can define these penalty costs in a time-based key figure in planning book 9ATSOPT.

The safety stock is the lower bound that can be defined on a time basis for stock on hand. It is always a soft constraint for the optimizer. There is another timebased key figure in planning book 9ATSOPT that you use to define penalty costs for falling below the safety stock level.
You can use the Display Dependent Objects function to define the upper limit for production for specific production process models (PPMs) or production data structures (PDS) and the upper limit for transportation for specific transportation lanes. You define the upper bounds for external procurement and stock on hand at location product level.

Only the relevant upper bounds are displayed on screen, based on your selection. Thus, if you choose a location product, only the upper bounds for external procurement and stock on hand are displayed. Note that when entering the upper bound for production, you do not enter the production quantity, instead enter the number of times the PPM or the PDS concerned is to be executed. To do this, you set how often you want PPM execution to be started within a period. The duration of the PPM or the PDS then determines the period in which product quantities are available. For example, if you want to define a quantity of 30 pieces as the upper bound on the third workday and the associated PPM or PDS produces 10 pieces each time it is executed (taking 3 days), on the first workday you have to specify that you want the PPM or the PDS to be executed for a maximum of three times - and therefore enter 3 as the value for the first workday.
In an additional key figure for the individual upper bounds, you can show that an upper bound value of 0 is to be interpreted as an actual upper bound by specifying not equal to 0. Otherwise, a value of 0 signifies that there is no upper bound.

Upper Bound and Lower Bound for Total Receipts In the data view OPT_TSRCBD, a table with key figures is available that you can use to define receipt upper bounds and receipt lower bounds. Both of these bounds are soft constraints for the optimizer. In two additional key figures, you can define the penalty costs for falling short of the receipt lower bound and for exceeding the receipt upper bound. Deactivation of Consideration of Time-Based Constraints You can specify in the SNP optimizer profile that you would like the system to ignore the time-based constraints in the optimization run (by going to the Extended Settings tab page and setting the Ignore Time-Based Constraints indicator). This can be a good idea if you want to use an SNP optimization bound profile for the optimization run, for example. If you use time-based constraints in conjunction with the bounds from the optimization bound profile, the constraints might cancel each other out. If this occurs, the optimizer will not be able to find a feasible solution. However, if you do use the SNP optimization bound profile in conjunction with the time-based constraints, the optimizer takes into account the smaller of the upper bound values that have been defined. Note that you can also define lower bounds in the optimization bound profile. If the lower bound defined here is higher than the upper bound defined in interactive planning, the optimizer will not be able to find a feasible solution. Mass Maintenance of Key Figures You can also define values for key figures using mass processing. To do this, choose the function Mass Maintenance of Time Series Key Figures (on the SAP Easy

Access screen, choose Advanced Planning and Optimization Supply Network Planning Environment Mass Maintenance of Time Series Key Figures).

Activities
...

1. On the SAP Easy Access screen, choose Supply Network Planning Planning Interactive Supply Network Planning (all Books). Choose the planning book 9ATSOPT in the planning area and the relevant data view. 2. Define the time-based upper and lower bounds as well as the relevant penalty costs in the planning tables. 3. Run the SNP optimizer in interactive Supply Network Planning or in the background. For more information, see running the optimizer from the interactive planning desktop and running the optimizer in the background.

Running the Optimizer in the Background


Use
The optimizer proposes a plan for multiple products simultaneously based on the minimum procurement costs, storage costs, transportation costs, and production costs without overloading resources.

Prerequisites
You have set up the planning area and planning book You have set up the master data for the optimizer You have maintained optimization profiles You have You have created a model name and version set up the supply chain model

You have released the demand plan to Supply Network Planning You have locked any inbound or outbound queues in the ERP system during the time of the optimization run:

If you cannot rule out that data will be transferred from an ERP system to the SAP SCM system (or from SAP SCM to ERP) using the Core Interface (CIF) during the optimization run, you can lock inbound or outbound queues in the ERP system from the SAP SCM system. This should prevent plan inconsistencies due to transaction data that is transferred from the ERP system to SAP SCM during the optimization run, which the optimizer then ignores. During the CIF transfer, you can also prevent planning objects from being locked for CIF or the optimizer. To lock outbound queues, you can use the /SAPAPO/CIFSTOPQUEUES and /SAPAPO/CIFSTARTQUEUES reports in SAP SCM. Reports RSTRFCI1 and

RSTRFCI3 are available for locking inbound queues (see also, OSS note 487261).

Procedure
...

1. From the SAP Easy Access screen, choose Advanced Planning and Optimization Supply Network Planning Planning Supply Network Planning in the Background Supply Network Optimization. 2. Enter the planning book and data view. 3. Enter an SNP planning profile that you may have defined in Customizing for SNP. This contains basis settings for the SNP planning procedures. If you do not specify a profile, the system uses the default profile activated in Customizing. 4. Enter a parallel processing profile that you may have defined in Customizing for SNP. This determines how the background jobs are divided into parallel processes. 5. Enter a selection profile in which you stored your selections in interactive Supply Network Planning or manually select data for planning. To enter data manually, follow this procedure:

2. ... 1. 2. a. Enter the planning version. b. Enter the products and locations you wish to plan. If you intend to plan all the products and locations of the planning version, you can leave these fields blank.

6. If you also want to plan all the products of a supersession chain as part of product interchangeability in SNP, make the relevant setting. For more information, see Product Interchangeability in Supply Network Planning. 7. In the Source Determination field, select the level of a source of supply hierarchy at which you want the system to consider sources of supply for in-house production. The default value is All Levels.

You can use this field in the planning with aggregated resources process, for example.
8. Specify the start and end date that you want the system to consider for planning. This entry is optional. If you do not enter a start and end date, the system uses the planning buckets profile that was specified in the data view. 9. Enter the name of the optimizer profile that you want to use for this optimization run. 10. Enter the name of the cost profile that you want to use for this optimization run. 11. Enter the identifier for the optimization bound profile you want to use for this optimization run. This entry is optional. 12. If you want to prioritize customer demands during optimization, specify a penalty cost group profile. For more information, see Prioritization of Customer Demands and Demands with High Volume. 13. If required, set the Modify Quota Arrangements indicator.

The results of the optimization run can be used to calculate quota arrangements for use in the heuristic (inbound quota arrangements) and the deployment heuristic (outbound quota arrangements). If you set the Modify Quota Arrangements indicator, the system automatically creates optimal quota

arrangements, which means that you do not need to maintain them manually in the Supply Chain Engineer. You use the Inbound, Outbound, and Both indicators to set whether the optimizer is to modify and create inbound quota arrangements, outbound quota arrangements, or both. In the Start Date for Modification and End Date for Modification fields, you can specify the horizon within which the system is to modify and create quota arrangements. If you leave these fields blank, the system modifies quota arrangements over the entire planning horizon. You can also specify the smallest period size for which the system is to modify and create quota arrangements. These options can help you to improve performance.

14.

You should use this feature with caution since there is no back-up of the original quota arrangements. If you define a subset of the model for the optimization run (for example, some of the locations), then the quota arrangements will only be changed for the locations that are part of the subset. The quota arrangements for the other locations remain unchanged. We recommend that you either optimize for the whole model or check the quota arrangements for the remaining locations and manually change them if necessary. Only use this function if the planning situation for the optimization run can be viewed as a representative planning situation and the overall planning environment is fairly stable. Otherwise the results of optimization will not lead to adequate quota arrangements. Choose Execute.

Results
At the end of the optimization run, you access the results by choosing Supply Network Planning Reporting Optimizer Log Data.Alternatively, you can display the results in interactive SNP planning (Supply Network Planning Planning Interactive Supply Network Planning).

See Also
Application Logs for Optimizers

Automatic Cost Generation


Use
Costs play an essential role for optimization-based planning in Supply Network Planning (SNP). The optimizer selects the plan with the lowest total costs from all the permitted production and distribution plans. This means that the optimizer also makes business decisions based on the costs involved for covering a demand at a certain point in time, for example. You can provide the optimizer with the costs for planning by specifying your actual costs such as production and transportation costs in the system. You can also define

control costs that are in accordance with your business goals. For the planner, however, the conversion of business goals into control costs is not easy. With the automatic cost generation function, you can easily generate all the control costs relevant to the optimizer (that is, the cost model). Thesystem generates these costs automatically based on the business goals you have defined. The system requires the main goal to be the maximization of the service level. You can also define the following goals:
Consideration of demand and product priorities Consideration of procurement priorities

In addition, you can use this function to quickly and easily create an optimizationbased production plan. To create a finite (capacity-based) production plan, you only have to make a few additional settings (such as the consideration of capacities).

Features
Generating the Cost Model The system generates the following control costs:
Storage costs Production costs, that is, costs of the production model (PPM) or of the production data structure (PDS). Product-specific transportation costs Procurement costs Penalty costs for shortfall of safety stock Penalty costs for non-delivery Penalty costs for late delivery

In order for the system to be able to calculate the costs for a late delivery, you must define a maximum delay in the product master data on the SNP 1 tab page. The system ignores all the costs you may have defined in the master data. They remain unchanged in the system even after cost generation, however. The system does not generate the following costs, because it would require additional information from the planner or because the costs are only relevant to complex scenarios:
Cost functions (production, shipment, procurement) Costs for means of transport Costs for the use of the available capacity of resources (costs for using the normal and maximum available capacities or for falling short of the minimum available capacity)

In addition, the system does not consider the cost profile for weighting costs that you can define for optimization-based planning.

Properties of the Generated Cost Model The system ensures the following properties of the generated cost model:
The model has no anomalies.

The system defines the costs such that undesired effects do not arise, such as:

Not covering a demand due to too low penalties costs for non-delivery Planning a shipment due to too low costs at the destination location Planning a shipment to save storage costs

The system also covers the demands as timely as possible.


The model is stable.

The costs are, for example, independent of period length and transaction data.
The model is coherent.

For example, the transportation costs increase proportionally to the shipment length and the product value increases with the depth of production. The system automatically uses the value 1 for the value of raw products (products without input products). If you want the system to base the calculation of the product value on the actual storage costs, you can make this setting in the SNP or deployment optimizer profiles on the Automatic Cost Generation tab page. The system cannot guarantee this model property, because the first two properties have higher priority and it is not always possible to guarantee all three. The generated cost model is independent from the costs defined in the master data (except for possible consideration of storage costs). The system does not support a combination of these two cost models (for example, completion of the master data cost model). Definition of the Business Goals The system calculates the costs based on the business goals you have defined. For further information see Definition of the Business Goals.

Actions
S

1. Define your goals for optimization-based planning as described. 2. If, for example, you want to create a finite (capacity-based) plan, set the corresponding indicator for the consideration of capacity restrictions on the General Restrictions tab page of the SNP or deployment optimizer profile. 3. Set the Automatic Cost Generation indicator in the SNP or deployment optimizer profile. 4. Execute an SNP or deployment optimization run. For more information, see Running the Optimizer in the Background, Running the Optimizer from the Interactive Planning Desktop, or Running Deployment Optimization.

5. Display the application log that is in the Results Log section and contains information about the generated costs. For more information about optimization logs, see Application Logs for Optimizers.

Definition of the Business Goals


Use
If you want to create an optimization-based production plan with the automatic cost generation function, first define your business goals for planning. The system then uses these goals to automatically generate the corresponding control costs, based on which the optimizer makes planning decisions. The main goal of planning is to maximize the service level. You can also define the following additional goals:
Consideration of demand and product priorities Consideration of procurement priorities

You define these goals in the SNP or deployment optimizer profile on the Automatic Cost Generation tab page.

Features
Consideration of demand and product priorities You can define priorities for three different priority classes of the demand and the safety stock:
Customer demand Corrected demand forecast Demand forecast Safety stock

The standard setting is that all priority classes and the safety stock have the same priority. In addition, you can define that the system also considers the priority of products. You can enter this priority in the master data of the location product on the SNP 2 tab page. The system considers the product priority in combination with the demand priority. You can define which priority is more important and is to be considered by the system first. To simplify this combination of both priority types, you must also subdivide the product priorities into three classes of A, B, and C products.

The following figure shows exactly how the system proceeds if the demand priority is more important than the product priority or vice versa:

If the demand priority is more important than the product priority, the system covers all the demand with priority class 1 (such as customer demand) for all location products first. It then covers all the demand with priority class 2, and so on. If the product priority is more important, the system covers all the demand of all priority classes for the location products with class A first, then all the demand for the location products with class B, and so on. Consideration of procurement priorities You can define that the system considers the procurement priorities of production process models (PPMs) or production data structures (PDS) as well as transportation lanes. You define this priority in the master data of the PPMs/PDS and transportation lanes (specific to the product). The procurement priority of sources of supply for inhouse production is always more important than the priority of sources of supply for external procurement (same as the SNP heuristic procedure). The system always tries to first cover all the demand of a period with receipts from all the sources of supply available in this period (in the sequence of the procurement priority of these sources of supply). Only after this does it try to cover the demand with receipts from sources of supply from an earlier period. If the system has to switch to an earlier or later period, it may not be able to follow this principle in this period.

Costs Maintenance
Use
Costs play an essential role for optimization-based planning in Supply Network Planning (SNP). The optimizer selects the plan with the lowest total costs from all the permitted production plans. Use this function to define all costs used by the optimizer and assigned to the master data from a single point of access. The master data is then automatically updated for the selected planning version. To call the function, on the SAP Easy Access screen, choose Advanced Planning and Optimization Master Data Application-Specific Master Data Supply Network Planning Maintain Costs(Directory) or Maintain Costs (Table).

Features
You can define the following costs: Production costs Storage costs Handling costs Transportation costs Procurement costs Costs for late delivery Costs for non-delivery Costs for using the available capacity of resources Cost functions

See Also
Master Data Setup for the Optimizer Master Data Setup for the Deployment Optimizer Automatic Cost Generation Application Examples for the SNP Optimizer

Prioritization of Customer Demands and Demands with High Volume


Use
During optimization-based planning in Supply Network Planning (SNP), you can prioritize customer demands and demands with high volume. In this way, you can ensure, for example, that demands from important customers or from customers with a high service level are covered by the SNP optimizer first. Since the SNP optimizer searches on the basis of costs for the solution with the lowest costs, you can influence the prioritization of demands by assigning correspondingly high penalty costs for non-delivery or delay to the customer demands and to the demands with high volume. These demands are then prioritized by the SNP optimizer. If you want to create a profit-oriented plan that considers

both the costs and the revenue, you can specify the actual prices of the products as the penalty costs for non-delivery of the products. Moreover, the SNP optimizer can generate proposals for capacity reservation in Production Planning and Detailed Scheduling (PP/DS). In this way, the demands that you prioritized in the SNP optimizer can be planned as priority in PP/DS too.

Prerequisites
In order that the SNP optimizer can prioritize customer demands and generate proposals for capacity reservation, the following prerequisites must have been met:
You have created penalty cost groups. To do so, on the SAP Easy Access screen, choose Advanced Planning and Optimization Master Data Application-Specific Master Data Supply Network Planning Define Penalty Cost Group.

You can use penalty cost groups to group demands so that you can assign penalty costs to them.
You have used BAdI /SAPAPO/SDP_RELDATA to assign the penalty cost groups to forecasts or to sales orders. To do so, in Customizing for Demand Planning (DP), choose Business-Add-Ins (BAdIs) Release SNP/DP Change Data During Release to SNP or R/3. For more information, see the Implementation Guide (IMG). You have released the forecast from DP to SNP by specifying descriptive characteristics such as Customer in a consumption group. For more information, see the documentation for DP under Release of the Demand Plan to SNP.

Alternatively, you can use Core Interface (CIF) to transfer sales orders from SAP ERP to SAP SCM. For more information, see the documentation for integration via Core Interface under

Integration of Orders.

On the SNP 1 tab page in the product master data, you have assigned penalty costs for nondelivery and for delay to the penalty cost groups. This makes the penalty costs customer-specific, for example.

If you specify the actual prices as the penalty costs for non-delivery, you must have activated Profit Maximization on the Solution Methods tab page in the SNP optimizer profile. In order that the SNP optimizer can prioritize demands with high volume, the following prerequisites must have been met:
You have defined a profile for quantity-based penalty costs (quantity profile) in the applicationspecific master data. To do so, on the SAP Easy Access screen, choose Advanced Planning and Optimization Master Data Application-Specific Master Data Supply Network Planning Define Profile for Quantity-Based Penalty Costs.

You define quantity intervals in the profile and assign them to penalty costs. You always enter the lower bound of the interval only. The upper bound is defined by the lower bound of the next interval. The lower bound of the first interval is always 0 and cannot be changed. The upper bound of the last interval is infinite. Changes to the profile are valid for the next SNP optimization run.

You have assigned the quantity profile to the product and to certain demand types on the SNP 1 tab page in the product master data. You can assign the profile in a time-dependent way or in a time-independent way.

You can also specify the profile for certain penalty cost groups (see above) and thereby assign the quantity-based penalty costs to certain customer demands. In this case, the prerequisites described above for the prioritization of customer demands must also be met. If you do not specify a penalty cost group (or you specify group 000), the quantity-based penalty costs are valid for the relevant demand type.

Activities
...

Prioritization of Customer Demands You perform one or more consecutive optimization runs by creating a penalty cost group profile for the demands to be prioritized in the next run and by specifying this profile for the next run. For more information, see Penalty Cost Group Profile as well as Running the Optimizer from the Interactive Planning Desktop and Running the Optimizer in the Background. Prioritization of Demands with High Volume You have the following options:
If you want to prioritize demands with high volume, you perform an optimization run for which you have assigned a quantity profile to the products and demand types as described above. If you want to prioritize demands with high volume in a customer-specific way, you perform one or more optimization runs for which you have assigned a quantity profile to the products, demand types, and penalty cost groups, as described above, and for which you have specified a penalty cost group profile for the optimization run.

Result The result of these optimization runs is a production and distribution plan that covers the demands according to their priority and that takes into account all capacity constraints. However, it can be the case that demands cannot be covered. Based on the optimization results, the SNP optimizer generates proposals for capacity reservation in PP/DS that you can release in PP/DS. In PP/DS, you can reserve capacity on the level of product, bucket, and descriptive characteristic. For more information, see the documentation for Capable-to-Promise (CTP) in PP/DS under Capacity Reservation.

Penalty Cost Group Profile


Definition
Profile that you can use for optimization-based planning in Supply Network Planning (SNP) to specify that customer demands are to be prioritized.

Use
You can use the penalty cost profile to define that the system first covers demands from penalty cost groups with a higher priority before covering those from penalty cost groups with a lower priority. To define the profiles, on the SAP Easy Access screen, choose Advanced Planning and Optimization Supply Network Planning Environment Current Settings Profiles Define SNP Penalty Cost Group Profiles and then assign them to individual optimization runs in interactive planning or when executing the SNP optimizer in the background.

Structure
The profile consists of the following components:
Fields to enter profile names and the corresponding descriptions Table to enter penalty costs with normal priority Table to enter penalty costs with high priority

The profile transaction is intended to allow you to create multiple profiles for multiple consecutive optimization runs. In the table for entering penalty costs with normal priority, you specify in a step-by-step way the penalty cost groups that you want to plan with higher priority in the next run. In the table for entering the penalty costs with high priority, you specify the penalty cost groups that were planned with priority in the previous run and that are to have a higher priority than the groups that you specify under penalty costs with normal priority in the next run. If you choose Generate Profile for Next Opt. Run, the system supports you when you create the next profile, in other words, it copies the penalty cost groups from the previous run to the Penalty Cost Groups with High Priority area.

Integration
You create the penalty cost groups in the application-specific master data and assign them to penalty costs for non-delivery and delay on the SNP 1 tab page of the product master data (see Prerequisites section under Prioritization of Customer Demands and Demands with High Volume). The SNP optimizer only takes the various penalty cost groups into account if you specify a penalty cost group profile when running the optimizer. Otherwise, the system uses the penalty cost values from the default penalty cost group 0000 for all demands. If you want to run the SNP optimizer with all the penalty cost groups, you should use a penalty cost group profile in which all the penalty cost groups were defined under penalty cost groups with normal priority.

Example
For example, you define multiple profiles for multiple consecutive optimization runs as follows:

...

1. You define the first profile for the first optimization run by specifying an interval of penalty cost groups under Penalty Cost Groups with Normal Priority that are to be planned by the optimizer with the highest priority (for example, groups 1-3). You then execute the optimization run. In this run, only these demands are planned. 2. You define the second profile for the second optimization run by specifying an interval of penalty cost groups under Penalty Cost Groups with Normal Priority that are to be planned by the optimizer with medium priority (for example, groups 4-6). Under Penalty Cost Groups with High Priority, you specify the penalty cost groups planned previously with high priority (for example, groups 1-3). If you choose Generate Profile for Next Opt. Run, the system copies the first three penalty cost groups to the Penalty Cost Groups with High Priority area.

You then execute the second optimization run. If you have fixed the orders, the demands from the penalty cost groups with high priority are considered during planned, but they are not rescheduled. If you have not fixed the orders, these demands are considered during planning and can be rescheduled, but they are treated with higher priority than the demands from the other penalty cost groups.
3. You define the third profile for the third optimization run by specifying an interval of penalty cost groups under Penalty Cost Groups with Normal Priority that are to be planned by the optimizer with low priority (for example, groups 7-9). Under Penalty Cost Groups with High Priority, you specify the penalty cost groups planned previously with high and medium priority (for example, groups 1-6). We recommend that you fix the orders for these penalty cost groups for the next run. You then execute the third optimization run.

Sequence-Dependent Lot-Size Planning

For optimization-based planning (see Optimization-Based Planning) in Supply Network Planning (SNP), you can specify that the system considers sequence-dependent lot-size planning. This allows the SNP optimizer to optimize the setup costs. First of all, you define setup transitions, setup costs, and setup times in a setup matrix. The SNP optimizer then takes this data into account and determines the solution with the lowest costs. An order sequence number is displayed for the SNP planned orders in the detail view of interactive SNP planning and in the optimization results log. The SNP optimizer uses the order sequence numbers to generate proposals for block planning in Production Planning and Detailed Scheduling (PP/DS).

Prerequisites
In order that the SNP optimizer can optimize the setup costs, the following prerequisites must have been met: You have created setup groups. To do so, on the SAP Easy Access screen, choose Advanced Planning and Optimization Master Data Application-Specific Master Data Production Planning Setup Group/Setup Matrix Maintain Setup Groups . Alternatively, you can transfer the setup groups from a connected ERP system to SAP SCM. For more information, see SAP Library at http://help.sap.com under SAP Business Suite SAP Supply Chain Management SAP SCM 7.0 SAP Advanced Planning and Optimization (SAP APO) Production

Planning and Detailed Scheduling (PP/DS) PP/DS Process Interactive Planning Detailed Scheduling Topics Detailed Scheduling Setup Matrix Integration of Setup Groups . The production data structure (PDS) used must contain a setup group. If you have transferred setup groups from the ERP system and have specified a setup group in the routing, they are automatically transferred to the relevant PDS. The function supports PDS only. In other words, production process models (PPMs) are not supported. PDS that were created using iPPE are not supported either. You have defined the setup statuses, setup transitions and the corresponding setup costs and setup times in the setup matrix. To do this, on the SAP Easy Access screen, choose Advanced Planning and Optimization Master Data Application-Specific Master Data Production Planning Setup Group/Setup Matrix Maintain Setup Matrix . Note that the SNP optimizer considers standard setup transitions only. In other words, it does not consider exception setup transitions. For more information, see SAP Library at http://help.sap.com under SAP Business Suite SAP Supply Chain Management SAP SCM 7.0 SAP Advanced Planning and Optimization (SAP APO) Master Data Application-Specific Master Data Master Data for Production Planning Setup Matrix . You have specified the setup matrix in the master data of a single-mixed resource or a bucket resource on the Time-Cont. Capacity tab page. Other resource types are not supported. You have set the PerLotSize indicator for the resource to Sequence-Dependent Lot-Size Planning on the SNP Bucket Cap tab page. A PDS can use only one resource for which this indicator has been set. A PDS must not exceed any planning period (bucket) within the defined time period for sequencedependent lot size planning. In the SNP optimizer profile, you have selected Discrete Optimization as the optimization method and, in the Sequence-Dependent Lot Size field on the Discrete Constraints tab page, you have specified a time period in which the SNP optimizer takes sequence-dependent lot sizes into account. The PDSs that run on sequence-dependent resources must not exceed any planning period (bucket). If you want the SNP optimizer to generate proposals for blocking planning in PP/DS, the following prerequisites must also be met: You have activated block planning in Customizing for SNP under Basic Settings Maintain Global SNP Settings . This is also a prerequisite for displaying information about the blocks in the detail view of interactive SNP planning.

Features Sequence-Dependent Lot-Size Planning


The sequence-dependent lot-size planning function offers the following: The SNP optimizer considers the setup transitions, setup costs, and setup times that you defined in the setup matrix. The SNP optimizer checks the setup groups of the production data structures used and determines the optimum sequence of PDS and created planned orders on the basis of costs.

The setup costs are displayed in the planning result of optimization in both interactive SNP planning and in the optimization results log. The sequence number of the order is displayed for the SNP planned orders in the detail view of interactive SNP planning and in the optimization results log.

Block Planning
The SNP optimizer uses the order sequence numbers to generate proposals for block planning in PP/DS. These proposals can be loaded to PP/DS. For more information, see the SAP Help Portal at http://help.sap.com under SAP Business Suite SAP Supply Chain Management SAP SCM 7.0 SAP Advanced Planning and Optimization (SAP APO) Production Planning and Detailed Scheduling (PP/DS) Planning with Characteristics Functions for Block Planning Downloading of SNP Blocks . In SNP, planned orders are combined to form blocks. Since these SNP blocks deviate from the PP/DS blocks, some of the prerequisites described in the PP/DS documentation mentioned above must be met. In the detail view of interactive SNP planning, you can display the start and end dates and times of the blocks for the planned orders. If you select a planned order in the detail view and choose Block View, the system displays all the orders belonging to a block, together with the relevant detailed information. You can use Bucket View to switch back to the normal detail view.

Activities
You run the SNP optimizer in interactive SNP planning or in the background. For more information, see Running the Optimizer from the Interactive Planning Desktop and Running the Optimizer in the Background. You then display the results in interactive SNP planning.

Cross-Period Lot Size Planning


Use
In some industry sectors (such as the process industry), setup activities have a great influence on lot size planning. If the setup costs are relatively high in comparison to the storage costs, orders are grouped into large lots to save on set up costs. For this reason, it is possible to run a cross-period lot size planning as part of optimization-based planning within Supply Network Planning. Here, the optimizer takes into account the setup statuses from the previous bucket if the same production process model (PPM) is being used to produce a product in that bucket. This means that the optimizer only schedules one setup operation per lot size. For this setup operation, the system then calculates the setup costs and setup consumptions (fixed resource consumption and material consumption) that were defined in the PPM for the resource set with the Cross-Period Lot Size indicator. The SNP optimizer does not support multi-level cross-period lot size planning, meaning that lot size planning can only be done at production level.

Integration
1. Within the campaign planning business process, cross-period lot size planning represents the preliminary stage of the actual campaign creation that is done in Production Planning and Detailed Scheduling (PP/DS). During planning, the SNP optimizer creates SNP planned orders that correspond to a production campaign that is created at a later point in PP/DS. You can convert these SNP planned orders into PP/DS orders. For more information, see Converting SNP and CTM Orders into PP/DS Orders. 1. The optimizer is also able to consider setup statuses resulting from already planned PP/DS orders. When doing this, it is possible to run an SNP PPM in a bucket (period) without taking into account setup expenses, if there is a PP/DS order with the associated PP/DS PPM, or if the corresponding setup expenses can be adopted from the previous bucket.

Prerequisites
The steps listed below are general prerequisites for running the SNP optimizer: 1. 2. 3. 4. 5. Planning Area Administration Master Data Setup for the Optimizer Model/Version Creation Supply Chain Model Setup Release of the Demand Plan to SNP

The following are special prerequisites for cross-period lot size planning:

1. 1.

Resource master data The optimizer only takes into account the setup statuses from previous buckets for the resource for which the cross-period lot size indicator has been set. Production process model (PPM) The PPM is permitted to use a maximum of one resource only for which the cross-period lot sizeindicator has been set. The PPM is not permitted to use any other resources that have been specified with a fixed resource consumption. The PPM duration must be less than or equal to the smallest bucket from the planning buckets profile used. The minimum PPM lot sizes and the discrete (integer value) lot sizes refer to the cross-period lot quantity. The optimizer plans a maximum of one setup operation per bucket.

2. 1. 2. 3. 4. 5. Profiles

In Supply Network Planning, you have also maintained the relevant profiles for SNP optimization, in particular the SNP optimizer profile (from the Implementation Guide (IMG), choose SAP Advanced Planner and optimizer (SAP APO) Supply Chain Planning Supply Network Planning Profiles Define SNP Optimizer Profiles). For more information, see Optimization Profiles and the corresponding Implementation Guide (IMG) documentation. In particular, you have made the following settings for cross-period lot size planning in the SNP optimizer profile: 1. You have chosen Discrete Optimization as your optimization method.

2. You have entered the horizon over which you want the optimizer to take into account the setup statuses from this previous bucket in the Cross-Period Lot Size field from the Discrete Constraints tab page. The optimizer can only do this if the PPM from the previous bucket is used to produce a product. 3. If you want the optimizer to take account of setup statuses resulting from already planned PP/DS orders, you must have activated the indicator CrossPeriod Lot Size Planning on the Integration tab page. A prerequisite for this is that the corresponding PP/DS PPM must be assigned to the SNP PPM.

Activities
1. You run the optimizer from the interactive planning desktop or in the background. For more information, see Running the Optimizer from the Interactive Planning Desktop and Running the Optimizer in the Background. For general information on the SNP optimizer, see Optimization-Based Planning. 1. The optimizer determines the most cost-effective solution to fulfil the demands. For example, to decide about lot sizes, the optimizer uses storage

costs and setup costs. Having larger lot sizes and only one setup operation per lot size saves on setup costs but results in higher storage costs. With smaller lot sizes, multiple setups mean that more capacity is required and this results in higher setup costs. 1. You display the individual stages and final results of the optimization run in interactive planning on the Optimization tab page within the optimizer window. You also receive a list of the costs determined by the optimizer.

Application Logs for Optimizers


Use
When you execute an optimization-based planning function in Supply Network Planning (SNP) in the background (mass processing), the system automatically generates an application log. Amongst other things, this log contains planning results, such as planned orders and stock transfers created, as well as error, warning, and information messages. The input data for the optimization run and the costs of the solution determined by the optimizer are also displayed, for example. The central Optimizer Log Data function is available for accessing optimization run logs. From the SAP Easy Access screen, choose Advanced Planning and Optimization Supply Network Planning Reporting Optimizer Log Data. You can use this function to access the following SNP planning functions:
SNP Optimizer Deployment Optimizer Capacity Leveling (optimization-based method) Sourcing of Forecast

Features
The Optimizer Log Data function provides an overview of the generated logs. Amongst other things, the list of logs contains the following data:

Log status

A traffic light or flag indicates whether the optimization run is still in progress, has already ended, or was terminated with a message (see F1 help).

Log creator Optimizer profile used Start and finish time of the run

Runtimes of the individual optimization steps

An optimization run has three steps (data reading, model consistency check, and solution calculation, as well as order creation).

Total costs of solution Log expiration date

You specify the log expiration date globally for all optimization logs in Customizing for Advanced Planning and Optimization (APO) under Basis Settings Optimization Basic Functions Maintain Global Settings. However, you can also change this date for one specific optimization run by choosing Change Expiration Date. The log is automatically deleted after the expiration date if you execute the /SAPAPO/OM_REORG_DAILY report. You can also delete the log from the list, set filters and sort entries.
If you double click a log or choose the log. Display Log, you receive the following data and sub-logs for

Input Parameter

Contains the settings that you made on the initial screen for the planning function.

Location Products

Contains the location products selected for the optimization run.

Deletion Time Period

Specifies a time period in which the system deletes existing planned orders and stock transfers before actual optimization.

Input Log

Contains the input data considered by the system during the optimization run (that is, master data and transaction data). The data is divided into a number of tables (such as ET_LOCMAT). You can display the content of these tables on the right-hand side of the screen. For more information, see Optimization Input Log.

Results Log

Contains all results of the optimization run, such as planned orders, stock transfers, resource consumption, costs, and penalty costs. The data is divided into a number of tables (such as ET_PROMO). You can display the content of these tables on the right-hand side of the screen.

Result Indicators

Contains indicators that display the quality of the optimization solution, such as service level and shortfall of safety stock. For more information, see Result Indicators.

Explanations

Contains the results of an explanation tool run (see below).

Extended Results Log

In this log, you can display the results of the optimization run in the interactive SNP planning form.

Message Log

Contains error messages, warning messages, and information messages generated by the system during the optimization run. They are ordered according to meaning, that is, whether they refer to the optimization run settings or to the three main steps of the run.

Trace File

All individual optimization run steps are logged in this text file. It is saved on the optimization server, but you can also download it to your own computer.

Costs

Contains detailed information about the costs of the solution determined by the optimizer. For more information, see Resulting Costs of Optimization.

Solution Quality

Contains the costs of the best solution determined by the optimizer up to the time displayed. If you used a decomposition method, you can also relate the costs the partial problem solved up to this time. You can use the log to determine whether you can reduce the optimizer runtime without effecting solution quality.

Note that the input log and the results log, as well as the deletion time period, are only displayed if you have set the Write All Log Data indicator in the optimizer profile being used. Even if an error occurred in the first step of the optimization run (data reading), the log may not be available. You can also download the input log and the results log to your own computer. To do this, choose Download Input Log or Download Results Log. The logs are then saved in RELATIOM text format. If you select a log and choose Explain, you go to the Explanations of SNP Optimization Resultsscreen. From this screen you can execute the explanation tool which explains two important exceptional situations of an optimization run: non-deliveries and shortfall of safety stock.

For more information, see Explanation of the Optimization Results.

Optimization Input Log


Definition
Log generated during an optimization run in Supply Network Planning (SNP). It contains all input data considered by the system during the optimization run (that is, master data and transaction data). The data is utilized in numerous tables (such as ET_LOCMAT).

Use
The input log is part of the application log. To access the log, on the SAP Easy Access screen, choose Advanced Planning and Optimization Supply Network Planning Reporting Optimizer Log Data. For more information, see Application Logs for Optimizers. You can download the log and give it to SAP support as a text file for analysis.

Structure
The individual sections of the log are detailed below.
Legend

Flag: Prof: Units:

X = Active, ' ' = Inactive SNP optimizer profile BTime = Base unit of time (days) BCurr = Base currency BProd = Base unit of measure of the product HanUn = Handling unit StoUn = Storage unit BRes = Base unit of measure of the resource

ES_CTRL These entries describe the general properties of the model. The entries are determined from the SNP optimizer profile or directly from the model. Discrete (integer value) transport lots are displayed in the History (trace file) of Optimization Runs (choose Tools APO Administration Optimization Log Display). NBUCK NPROD NLOCS NSUBL Number of buckets Number of products Number of locations Number of sublocations

NPROM NRESO NREFA NARCS NFLEE NDEMC NDEMA DISRF DISRZ DISTR DISPR KAMPA TRLOS PRLOS COSTR COSPD COSPC SEQLS NPENG NQTAA NCHAI NFFC NSTUP NPROG

Number of production process models Number of resources Number of resource families Number of arcs Number of fleets Actual number of demand classes Number of demand vectors Prof: End bucket for increasing production resource discretely Prof: End bucket for using fixed production resource consumption Prof: End bucket for using discrete fleet on transportation lanes Prof: End bucket for using integral PPM Prof: End bucket for campaign + D416 planning Prof: End bucket for using minimum transportation lot size Prof: End bucket for using minimum production lot size Prof: End bucket for using transportation cost function Prof: End bucket for using production cost function Prof: End bucket for using procurement cost function End bucket for sequence resource planning Number of penalty groups Number of quota arrangements Number of supersession chains Number of form-fit-function classes Number setup matrices Number of product groups

ET_INEXKEY These entries are the external keys for internal object keys. In particular, there is a list of calendar data for the day numbers, and a list of product and location numbers for the GUIDs. INKEY EXKEY GUID (unique internal key) Corresponding external key

ET_BUCKDF These entries show the bucket definition (time intervals) upon which all optimizer planning is based. The source of this information is either the selected planning buckets profile or the planning start and end date. BUCKE* VALTO VALFR Bucket no. End date of the bucket (day no., 1st day is 1/1/1970) Begin date of the bucket (day no., 1st day is 1/1/1970) BTime BTime

ET_MATERIAL The validity period of all products selected for optimization is stored here. At present, this always encompasses the entire planning horizon. MATID* BCKTO BCKFR Product GUID Valid to bucket no. Valid from bucket no.

ET_LOC Information about the existence or non-existence of a defined handling capacity (handling resource) is stored here for locations. LOCID* RESIN MAXIN RESOU Location GUID Handling-in resource GUID or dummy resource, if no handling-in resource is maintained Prof: Flag: Handling-in resource active (not activated, if dummy resource is used) Handling-out resource GUID or dummy resource, if no handling-out resource is maintained Prof: Flag: Handling-out resource active (not activated, if dummy resource is used)

MAXOU

ET_SUBLOC A storage resource is defined here with information about whether it can be extended. SUBID is currently the resource ID. The source of this information is the location master and, if in existence, storage resource maintenance. Extension is allowed if the resource has two capacity variants. SUBID* MAXFL Storage resource GUID or dummy resource, if no storage resource is maintained Prof: Flag: Storage resource active (not activated, if dummy resource is used)

ET_LOCMAT The properties of location-dependent products are shown here. Resource consumption is listed, in particular. The source for this is the location product master. LOCID* MATID* SUBID HCOST BUCFL SSPEN MAXST MAXFL STOCK CONIN COSIN CONOU COSOU RECTI ISSTI CACON WASFL WASTE STODU FCOST FPERF Location GUID Product GUID Storage GUID Storage cost Prof: Flag: Storage cost: Multiply by bucket length Penalty for not covering safety stock Maximum stock level of the product Flag: Maximum stock level active Initial stock Consumption of input handling capacity Handling-in cost Consumption of output handling capacity Handling-out cost Goods receipt processing time in days Goods issue processing time in days Storage capacity consumption Flag: Shelf life penalty is active Shelf life: Penalty for wasted quantity Shelf life: Storage duration Linear procurement cost Procurement permitted and/or product subject to incremental optimization BCurr/BProd BTime BCurr/BProd BProd HanUn/BProd BCurr/BProd HanUn/BProd BCurr/BProd BTime BTime StoUn/BProd BCurr/BProd BCurr/BProd

SSMTH PLREL

Safety stock method X if PPM/PDS relevant for planning

ET_PROGRP This table contains the master data of the product groups for which you can define quota arrangements. MATID PROGR Product ID Product group

ET_QTAHEAD This table contains the header master data of the quota arrangements.
QTAID LOCID MATID PROGR VALFR VALTO Unique key for quota arrangement header Location ID Product ID Product group Valid-from date Valid-to date

ET_QTAITEM This table contains the item master data of the quota arrangements.
QTAID SRCLO ARCID PROID FPERF QUOTA LOPEN UPPEN Unique key for quota arrangement header Source location ID Relationship between two locations Source PPM Switch external procurement (X = external procurement, = otherwise) Quota arrangement number Penalty for deviation below target quantity Penalty for deviation above upper quantity

ET_RCPBND This table contains the data for the receipt bound that you can define as a timebased constraint.
LOCID MATID BUCKE LOWBN UPPBN Location ID Product ID Bucket Lower limit Upper limit

LOPEN UPPEN BNDFL

Penalty for deviation below lower bound Penalty for deviation above upper bound Upper limit active flag

ET_RESOURCE Production resources that are used in the production process models are listed here (see the ET_PRORES section below). UNIVO is currently always equal to 1. RESID* RFAID UNIVO KAMPA SETID Resource GUID Resource family GUID (currently the same as resource) Unitary volume Flag: Resource is a campaign resource ID of setup matrix BRes

ET_SETUPMATRIX This table contains the data for the setup matrix. SETID GRFRO GROTO SCOST STIME Setup matrix ID Setup group ID Setup group ID Setup cost Setup times in sec.

ET_RESFAM Production resources are allowed to be extended here if a second capacity variant has been defined in the resource master. The resource family is currently always the same as the production resources (one-to-one). RFAID* MAXFL DISCR Resource family ID Flag: Resource has a capacity constraint Prof: Flag: Discrete increase of resource family

ET_FLEET Fleet refers to the transportation resource that has been specified for a transportation lane. A possible extension and the costs related to it are determined from the resources second capacity variant. FLEID* MAXFL TUNIA Fleet GUID Flag: Consider maximum fleet capacity Capacity 1 of one truck TraUn1

TUNIB TUNIC

Capacity 2 of one truck (not used) Capacity 3 of one truck (not used)

TraUn2 TraUn3

ET_ARC All the transportation lanes that have been defined for the model in the Supply Chain Engineer are listed here. ARC refers to a transportation lane/means of transport combination. ARCID* FLEID LOCFR LOCTO TTYPE DURAT RNDTR TCTYP DISCR RLDUR Arc GUID Fleet GUID Location from GUID Location to GUID ID for means of transport Duration of shipment (base time unit) Bucket offset (rounding limit for transportation times) Variable transportation cost for the fleet Flag: Using discrete transportation fleets Resource load duration BTime BCurr/TraUn1 BTime

ET_ARCMAT Product-dependent properties for the transportation lane are shown here. Data is taken from the Supply Chain Engineer. Standard entries are generated if the product has not been assigned to the transportation lane and the All Products indicator has been set at the transportation lane. The lot size information is taken from the lot size profile (transportation lanes) defined at the transportation lane. ARCID* MATID* VALTO VALFR MINLO MAXLO MAXFL TRVOL TCONA TCONB TCONC TCOST Arc GUID Product GUID Valid to date (base unit of time) Valid from date (base unit of time) Minimum number of lots Maximum number of lots Flag: MAXLO active Lot size in product units Capacity consumption for 24 hours Capacity consumption for the transportation time that is less than 24 hours Capacity consumption (not used) Variable transportation cost for "arc BCurr/BProd BProd TraUn1/BProd TraUn1/BProd BTime BTime TRVOL TRVOL

product" SUBCO Flag: X Product will be subcontracted

ET_LOCC The handling resources available capacity is listed here. Figures are determined from the resources first capacity variant. Gaps in the intervals are defined by the resource calendar or shipping calendar of the location. RESID* VALTO* VALFR MAXHA COUND UNPEN Handling resource GUID Valid to date (base unit of time) Valid from date (base unit of time) Handling capacity Minimum resource consumption Penalty per unitary volume dropping minimum capacity BCurr/Univo BTime BTime HanUn/BTime

ET_LOCUC A possible extension of the handling resources available capacity is listed here. Figures are determined from the resources second capacity variant by subtracting the first capacity variant values. Gaps in the intervals are defined by the resource calendar or shipping calendar of the location. RESID* VALTO* VALFR INCHA INPEN Handling resource GUID Valid to date (base unit of time) Valid from date (base unit of time) Penalty per unitary volume for increasing capacity BTime BTime BCurr/Univo

Upper bound for increasing handling capacity HanUn/BTime

ET_SUBLOCC The storage resources available capacity is listed here. Figures are determined from the resources first capacity variant. The interval gaps are defined by the resource calendar. SUBID* VALTO* VALFR MAXSL COUND UNPEN Sublocation GUID Valid to date (base unit of time) Valid from date (base unit of time) Capacity volume of storage (sublocation) Minimum resource consumption Penalty per unitary volume dropping minimum BCurr/Univo capacity BTime BTime StoUn

ET_SUBLOCUC A possible extension of the storage resources available capacity at a location is listed here. Figures are determined from the resources second capacity variant by subtracting the first capacity variant values. The interval gaps are defined by the resource calendar. SUBID* VALTO* VALFR INCSL INPEN Sublocation (storage) GUID Valid to date (base unit of time) Valid from date (base unit of time) Penalty per unitary volume for increasing capacity BTime BTime BCurr/Univo

Upper bound for increasing storage capacity StoUn

ET_RESC The production resources available capacity is listed here. Figures are determined from the resources first capacity variant. The interval gaps are defined by the resource calendar. RESID* VALTO* VALFR MAXRE COUND UNPEN CCOST Resource GUID Valid to date (base unit of time) Valid from date (base unit of time) Production resource capacity Minimum resource consumption Penalty per unitary volume dropping minimum BCurr/Univo capacity Cost per unitary volume for capacity BCurr/Univo BTime BTime BRes/BTime

ET_RESFAMC A possible extension of the production resources available capacity is listed here. Figures are determined from the resources second capacity variant by subtracting the first capacity variant values. The interval gaps are defined by the resource calendar. RFAID* VALTO* VALFR INCRF INPEN Resource family GUID Valid to date (base unit of time) Valid from date (base unit of time) Upper bound for increasing production resource Penalty per unitary volume for increasing capacity BTime BTime Univo/BTime BCurr/Univo

ET_FLEETC The transportation resources available capacity is listed here. Figures are determined from the resources first capacity variant. The interval gaps are defined by the resource calendar. FLEID* VALTO* VALFR MAXFL COUND UNPEN Fleet GUID Valid to date (base unit of time) Valid from date (base unit of time) Capacity measured in trucks Minimum resource consumption Penalty per unitary volume dropping minimum BCurr/Truck capacity BTime BTime Truck/BTime

ET_FLEETUC A possible extension of the transportation resources available capacity is listed here. Figures are determined from the resources second capacity variant by subtracting the first capacity variant values. The interval gaps are defined by the resource calendar. FLEID* VALTO* VALFR INCFL INPEN Fleet GUID Valid to date (base unit of time) Valid from date (base unit of time) Upper bound for increasing fleet capacity Penalty per unitary volume for increasing capacity BTime BTime Truck/BTime BCurr/Truck

ET_PROMO The properties of the production process model (plan or PPM) are stored here. A prerequisite, however, is that the PPM has been assigned to the model in the Supply Chain Engineer. This information is defined in master data maintenance for the PPM. Time-dependent PPMs are converted into multiple entries for the optimizer, and the validity period of each one is set accordingly. The master resource is the PPM calendar resource. PROID* LOCID MATID LOTSZ BCKTO BCKFR PMINQ Production process model GUID Location GUID Product GUID Fixed lot size of the location product Valid to date in buckets Valid from date in buckets Minimum production lot size ProMod BProd

PMAXQ MAXFL DURAT DISCR PCOST RNDPR RESID GRFRO PLREL

Maximum production lot size Flag: PMAXQ active Duration: 0 = one day, 1 = two days Flag for using discrete production Variable cost of PPM Bucket offset Resource GUID for calendar Setup group of this PPM/PDS X if PPM/PDS relevant for planning

ProMod BTime BCurr/ProMod

ET_PRORES Consumption of production resources for the PPM is listed here, as defined in the production process model master data in Mode Bucket consumption. PROID* RESID* OFSTO* BCKTO* VCONS FCONS Production process model GUID Resource GUID Consumption time offset Valid to date of bucket interval Variable consumption of the resource Fixed consumption of the resource BRes BRes BTime

ET_PROMAT The product flow for the PPM, as defined in the Products section of production process model master data, is listed here. It represents the bill of materials (BOM) structure, where finished products have a plus sign and input products a minus sign. PROID* MATID* OFSTO* LOCID* BCKTO* OUTIN FCONS Production process model GUID Product GUID Input/output time offset Location GUID Valid to date of bucket interval Output(+) or input(-) quantity Fixed input(-) quantity BProd BProd BTime

ET_RESINI This table contains the initial setup statuses of the resources for cross-period lot size planning (set up or not set up). RESID* PROID* Resource GUID Production process model GUID

EDATE* BDATE* QUANT APPLI SETUP SEQID

End date Start date Output quantity for master product Application: P->PP/DS S->SNP Flag: Order with setup Sequence ID

BTime BTime BProd

ET_LOCPROD The required safety stock (target stock levels), fixed demands (FPROD with minus sign), and receipts for the products are defined in this table. The latter entries result from planned orders and stock transfers that had been fixed before the optimizer was run. This fixing is done both manually and when orders are transferred to the PP/DS application. Receipts and issues are also fixed when the optimizer has been run incrementally (for a subset of products from the model). LOCID* MATID* BUCKE* SAFTY MAXST SAPEN STPEN FPROD SVTTY FDIST FSUBST Location GUID Product GUID Date bucket of safety stock and FPROD Safety stock (not a demand!) Maximum stock level of the product Penalty for not covering safety stock Penalty for violating the maximum stock level Confirmed production, includes intransit quantities Safety days supply Aggregated distribution quantity Aggregated substitution quantity BProd BProd BCurr/BProd BCurr/BProd BProd

ET_DEMCLTIM The maximum delay that is to be allowed for finished products is defined here. The values are taken from the product master (the SNP 1 tab). There are currently only three categories: 1 for customer demands, 2 for corrected demand forecasts, and 3 for demand forecasts. Costs for delivering the finished products late, or for not delivering them are also defined. The values are taken from the product master (the SNP 1 tab). The values are not defined as time-dependent in SAP APO, meaning that BCKTO is the same as the planning end date. DEMCL* LOCID* MATID* Demand class (highest priority = 1) Location GUID Product GUID

BCKTO* LAPEN MAXLA NDPEN

Valid to bucket Penalty for lateness Maximum lateness Penalty for not delivering BCurr/(BTime*BProd) BTime BCurr/BProd

ET_DEMAND This table contains all the customer demands and forecast demands that have been read for the model from liveCache. LOCID* MATID* DEMCL* BUCKE* DEMAN Location GUID Product GUID Demand class (highest priority = 1) Demand date given in bucket Quantity of demand BProd

ET_PROCBND Target procurement corridor. LOCID* MATID* BUCKE* LOWBN UPPBN INITV BNDFL Location GUID Product GUID Bucket Lower bound Upper bound Initial value (result of previous run) Flag: Upper bounds are active BProd BProd BProd

ET_PRODBND Target production corridor. PROID* BUCKE* LOWBN UPPBN INITV BNDFL Production process model GUID Bucket Lower bound Upper bound Initial value (result of previous run) Flag: Upper bounds are active ProMod ProMod ProMod

ET_TRANBND Target stock transfer corridor. ARCID* Arc GUID

MATID* BUCKE* LOWBN UPPBN INITV BNDFL

Product GUID Bucket Lower bound Upper bound Initial value (result of previous run) Flag: Upper bounds are active BProd BProd BProd

ET_STCKBND Target stock level corridor. LOCID* MATID* BUCKE* LOWBN UPPBN INITV BNDFL Location GUID Product GUID Bucket Lower bound Upper bound Initial value (result of previous run) Flag: Upper bounds are active BProd BProd BProd

ET_DELIBND Target demand fulfillment corridor. LOCID* MATID* DEMCL* DELAY* BUCKE* LOWBN UPPBN INITV BNDFL Location GUID Product GUID Demand class (highest priority = 1) Lateness measured in buckets Bucket Lower bound Upper bound Initial value (result of previous run) Flag: Upper bounds are active BProd BProd BProd

ET_TRANCOS Stock transfer cost functions are defined here. These functions are analyzed on the basis of this formula: Cost = FIXCO + VARCO* (X ORIGN). The cost function is assigned to the product-dependent transportation lane in the Supply Chain Engineer. ARCID* ORIGN* FIXCO Arc GUID Smallest value Fixed cost TraUn1 BCurr

VARCO

Variable cost

BCurr/TraUn1

ET_PRODCOS Production cost functions are defined here. These functions are analyzed on the basis of this formula: Cost = FIXCO + VARCO* (X ORIGN). The cost function is assigned to the plan in master data maintenance for the production process model. PROID* ORIGN* FIXCO VARCO Production process model GUID Smallest value Fixed cost Variable cost ProMod BCurr BCurr/ProMod

ET_PROCCOS Procurement cost functions are defined here. These functions are analyzed on the basis of this formula: Cost = FIXCO + VARCO* (X ORIGN). This cost function is assigned to the product in the location product master. LOCID* MATID* ORIGN* FIXCO VARCO Location GUID Product GUID Smallest value Fixed cost Variable cost BProd BCurr BCurr/BProd

ET_CHAIN This table contains the master data for the supersession chains (product interchangeability). GROUPID LOCID PRODOLD PRODNEW Interchangeability group identification Location ID Old product ID New product ID

VALIDFROM Validation date from DIRECTION Direction of interchangeability (F = forward, I = full ) USEUP Use-up date

ET_FFF This table contains the master data for form-fit-function classes (FFF classes, product interchangeability). GROUPID LOCID Interchangeability group identification Location ID

PRODID

Product ID

LEADPRODFLAG Flag for leading product (X = leading product, space = non-leading product)

Resulting Costs of Optimization


Definition
Log generated during an optimization run in Supply Network Planning (SNP). It contains detailed information about the costs of the solution determined by the optimizer.

Use
The log is part of the application log that you can access by selecting Advanced Planning and Optimization Supply Network Planning Reporting Optimizer Log Data from the SAP Easy Access screen. For more information, see Application Logs for Optimizers.

Structure
The individual fields of the log are detailed below.

Field
User Current date Time version Optimizer profile Cost profile Bound profile Total costs

Information displayed
The planner's name. The date the Optimization run was executed. The time when the Optimization run was executed.. The planning version used for the optimization run. The optimizer profile used for optimization run. The cost profile used for optimization run. The SNP optimization bound profile used for optimization run. The total costs associated with the solution proposed by the system. The cost categories are displayed in total values for all objects throughout the supply chain. The total costs are made up of all the cost categories displayed in this log. The total production costs for this plan based on the pieces produced using the production process models PPMs with the associated cost data, displayed in total values for all objects throughout the supply chain. The total procurement costs for this plan. The total storage costs for this plan based on the capacity consumption of products stored at the storage resource, displayed in total values for all objects throughout the supply chain. The total costs incurred as a result of a requirement to expand storage capacity for this plan displayed in total values for all objects throughout the supply chain. The total penalty costs incurred because the safety stock level falls below the specified requirement for safety stock for this plan displayed in total values for all objects throughout the supply chain.

Production costs

Procurement costs Storage costs

Storage expansion

Penalty costs for safety stock deficit

Field
Transportation costs Handling capacity expansion Transportation capacity expansion Production resource expansion Delay penalty Shortfall penalty

Information displayed
The total transportation costs for this plan displayed in total values for all objects throughout the supply chain. The total costs incurred as a result of a requirement to expand the handling capacity of one or more resources for this plan displayed in total values for all objects throughout the supply chain. The total costs incurred as a result of a requirement to expand the transportation resource capacity for this plan displayed in total values for all objects throughout the supply chain. The total costs incurred as a result of a requirement to expand the production resource capacity for this plan displayed in total values for all objects throughout the supply chain. The total penalty costs incurred as a result of all deliveries that are late displayed in total values for all objects throughout the supply chain. The total penalty costs incurred as a result of all deliveries of all products that are less than the quantity ordered displayed in total values for all objects throughout the supply chain. The total penalty costs incurred for exceeding maximum stock on hand. The total penalty costs incurred for falling short of the minimum resource utilization defined in the resource master data.

Penalty costs for exceeding maximum stock on hand Penalty costs for falling short of minimum resource utilization

Result Indicators
Definition
Indicators that show the quality of an optimization solution.

Use
If you have successfully executed an optimization run and have created a log for this run, the log contains a series of result indicators. They show the quality of the optimization solution with reference to the following factors:
Demand Fulfillment Stock Level Resource Utilization

From the SAP Easy Access screen, you choose Advanced Planning and Optimization Supply Network Planning Reporting Optimizer Log Data. You then select an optimization run with a double-click. The tree structure of the logs contains the entry Result Indicatorswith the two aggregation levels Model-Dependent Indicators and Location Product-Dependent Indicators.

Structure
The system calculates the following indicators for the quality of an optimization solution:
Demand Fulfillment

Service level (in percent) Delayed demand fulfillment (in percent) Average delay (in days)

The system also calculates these indicators separately for the following priority classes:

Customer requirement Demand forecast Corrected demand forecast

Pseudo-hard demand (if you have made the setting in the optimizer profile that the system considers the dependent demand and/or distribution demand of fixed orders as a pseudo-hard constraint. That means that the system may allow shortages for which it calculates penalty costs).

Stock Level

Fulfillment of safety stock demand in percent Average stock level

Resource Utilization

The system calculates the resource consumption for the following resource types.

Production resources Storage resources Transportation resources Handling resources

You can also display the resource utilization for each period in the capacity view of interactive SNP planning. The capacity view always shows the current resource utilization based on the data saved in liveCache. However, the data calculated by the explanation tool is available for as long as the output log of the optimization run is available.

The system calculates the result indicators at the level of the model and each location product or resource, and displays this data directly in the optimization run log or under the Result Indicators entry. The indicators for the utilization of the individual resources are displayed in the result log. To aggregate the data of each location product at different levels (such as location level or product level), you can transfer the data to the SAP NetWeaver Usage Type Business Intelligence (BI) using the DataSource 0APO_SNP_INDICATOR. For more information, see the documentation for component SAP NetWeaver under BI Content Supply Chain Management Planning. You can also simulate a simple aggregation with the SAP List Viewer (ALV). The following table shows the aggregation levels at which the result indicators are displayed in the optimization log:
Servic e Level Delay in Percen t Averag e Delay Service Level per Deman d Class Delay in Percent per Deman d Class Averag e Delay per Deman d Class

Averag e Stock Level

Safety Stock Shortfal l x

Utilizatio n per Resource x

Model Location Product Resourc e

x x

x x

x x

x x

x x

x x x

x x

Explanation of the Optimization Results


Use
Optimization-based planning in Supply Network Planning (SNP) pursues a global solution approach by considering all restrictions and costs simultaneously and across the entire model. It therefore frequently finds a better solution than is possible with other planning methods. However, the results of the optimization run are not always easy to understand. You can use the explanation tool to have the system explain two significant exceptional situations of an optimization run:
Non-delivery Shortfall of safety stock

This function shows you the possible causes for the exceptional situations in the optimization run log. You can use the causes shown to check whether you can solve the problem by increasing capacities or extending horizons, for example. The

system also suggests additional orders that you could use to remedy the missing quantities. Among other things, you can specify the location products for which you want the explanation, and how detailed it should be.

Prerequisites
You have executed an optimization run and created a log for this run (that is, you have set the Write All Log Data indicator in the SNP or deployment optimizer profile). The explanation tool refers to the result of the optimization run as you see it in the log. Between the optimization run and explanation run, you have not changed the SNP or deployment optimizer profile you used for the optimization run. You have also not changed the optimizationrelevant settings in planning version management. In the case of a deployment optimization run, you have chosen an optimal cost allocation. The explanation tool does not support fair share or push distribution.

Features
Non-deliveries and lack of safety stock can have the following five causes:
Capacity Constraints Time-Based Constraints and Maximum Lot Sizes Product Availability Lead Time Costs The explanation tool displays these causes, but does not explain why the optimizer fulfills the demand of one product but not of another when there is a lack of capacity.

Capacity Constraints In the SNP or deployment optimizer profile, you have defined that the optimizer is to consider certain capacity constraints. The optimizer considers the resource capacity defined in the resource master data. A possible cause for non-deliveries is that the system cannot fulfill the demand with the available resource capacity. The system shows you the following data of the capacity problem:
Resource with the capacity problem. Number of the period (bucket) where the capacity problem occurs. Missing capacity of the resource. If your planning buckets profile also includes daily periods, the system cannot determine any capacity problems caused by calendar problems within the time frame covered by daily periods. For example, the system cannot suggest capacity could be made up by working on a holiday.

Time-Based Constraints and Maximum Lot Sizes In interactive SNP planning, you have defined time-based constraints (upper limits) for the capacity of specific sources of supply (such as for production or transportation). For more information, see Definition of Time-Based Constraints in Interactive Planning. In the SNP or deployment optimizer profile, you have also or alternatively defined that the optimizer is to consider maximum lot sizes. The system displays the following data:
Name of the source of supply for which you have set the upper limit or maximum lot size. Name of the product for which you have set the upper limit or maximum lot size. Procurement type of the location product (in-house production, external procurement, and so on). Number of the period where the capacity problem occurs. Quantity by which you must raise the upper limit to solve the problem. In the case of the production upper limit, the system does not show the quantity but rather the number of executions of the production model (PPM) or production data structure (PDS). An execution of the PPM or PDS corresponds to the output quantity you specified in the PPM/PDS.

Product Availability A possible cause for non-delivery can be that products are not available because a source of supply does not exist (for example, because the bill of material has not been completely defined). The system shows you the following data of the product availability:
Name of the product and location Number of the period in which the product quantity is missing Missing quantity of the product The system does not check the validity of PPMs/PDSs or transportation lanes. It also does not check the validity of time-dependent parameters of PPMs/PDS (such as material consumption). If you have defined a PPM/PDS that is not valid until the middle of the planning horizon, for example, the system does not determine any availability problems in the first half of the planning horizon.

Lead Time Due to a long duration of shipment and production, the lead time it takes for a product to be available in a specific period can stretch over several periods. The system therefore frequently cannot fulfill demands because the lead time stretches into the production or stock transfer horizon, or the planned delivery time. The lead time can even stretch back into the past (before the planning period). The system shows you the following data of the lead time:
Name of the product and location Name of the source of supply

Procurement type of the location product

If the lead time stretches into the past, the procurement type is S (initial stock level).
Missing quantity of the product Start and finish time of the order Number of days by which the corresponding horizon (production or stock transfer horizon) or the planned delivery time has been violated.

Costs The fulfillment of the demand and the safety stock requirement is called a soft constraint for the SNP or deployment optimizer. That means there are penalty costs for not fulfilling the demand. If you have set the penalty costs for non-delivery and safety stock shortfall too low in the location product master data, the optimizer may decide not to fulfill the demand. This may be the case if the total costs are lower when demand is not fulfilled. The system displays this possible cause in a message.

If you have not defined penalty costs for safety stock shortfall, the optimizer cannot determine the cause. If you run a model consistency check, you will, however, see a corresponding message.

Order Suggestions The system suggests additional orders that you could use to remedy the missing quantities.

If you use the suggested orders or try to solve the exceptional situations another way depending on the displayed causes, a new optimization run can however still lead to similar or different problems due to the dependencies. For example, if you increase the capacity of a resource to remedy the missing quantities of a specific product, the system can use the additional capacity to cover the missing quantities of another product with higher priority.

Further Information The explanation tool only generates one possible explanation for each exceptional situation. However, there may be other explanations as well. For example, if the system finds a capacity bottle-neck for a resource and suggests increasing the capacity of this resource, another solution might be to increase the capacity of an alternative resource. If the results of the explanation tool are incorrect, this might be because the optimization solution on which they are based was not optimal (for example, due to runtime restrictions).

Activities
To execute the explanation tool, from the SAP Easy Access screen, choose Advanced Planning and Optimization Supply Network Planning Reporting Optimizer Log Data. Then select an optimization run and choose Explain. The Explanations of the SNP Optimization Results screen appears. Here you make settings such as the target and level of detail of the explanation, and choose Execute. For more information, see Configuration of the Explanation Tool. After you have executed the explanation run, you see the Optimization Run X screen that displays the logs for the selected optimization run. The tree structure contains the entry Explanations with the subentries Configuration and Explanation Results. If you double-click on these entries, you see your entry data and/or the results of the explanation run on tab pages on the right side of the screen. If the upper table on the right side of the screen contains several entries, you can double-click on an entry in the lower table to see its detailed data. You can also execute the explanation tool from the Optimization Run X screen by choosing Explain. If you want to execute the explanation tool in the background, choose Advanced Planning and Optimization Supply Network Planning Reporting Explanation of Optimization Results.

Configuration of the Explanation Tool


Purpose
You can configure the explanation tool for an optimization log in Supply Network Planning (SNP) according to your requirements. This means you can choose which exceptional situations you want explained and how detailed you want the explanation to be. This affects, for example, the complexity of the calculation and thus the runtime as well.

Process
...

1.

Selection of the Optimization Run

You can select a specific optimization run directly or you can specify which run of a specific user is to be explained (going backward: the fourth to last run is run no. 4, for example).
2. Target of the Explanation

You can specify whether you want an explanation for the causes for non-delivery only, or for the causes for safety stock shortfall only, or both. In addition, you can specify the priority classes of the demand for which you want the system to determine these causes (demand forecast, customer demand, and so on).

You also have to show the system how your model is structured. By doing so, you are giving the system information about the sequence in which it is to check the possible causes for an exceptional situation. Depending on whether your model is based on control costs or actual costs or whether it is in the structure phase, other causes for the exceptional situation could be possible. Since the causes are dependent on one another, the check sequence of these causes is crucial for the analysis. The following table shows the sequence of the analysis depending on the model:
Model based on control costs (such as high non-delivery costs with the goal of maximizing the service level) Costs Time-based constraints and maximum lot sizes Capacity restrictions Horizons (such as production horizon) Product availability Planning horizon Model based on business (actual) costs (such as prices as costs for non-delivery) Time-based constraints and maximum lot sizes Capacity restrictions Horizons Costs Product availability Planning horizon Model in the structure phase (master data is in the structure phase and might not yet be complete) Costs Product availability Time-based constraints and maximum lot sizes Capacity restrictions Horizons Planning horizon

In the explanation results, the analysis phase displayed is the one in which the system has determined the cause.

3.

You have defined high penalty costs for non-delivery in the location product master data to ensure that the system covers as many demands as possible. Since your model is therefore based on control costs, you set this as the target of the explanation. However, the explanation tool ascertains that a demand was not covered. A probable cause is that you have not set the penalty costs for non-delivery high enough to prevent nondeliveries. According to your setting, the system first checks whether or not the penalty costs are the cause for the non-delivery. If so, the system does not have to check for any other causes (such as lack of capacity). Object Selection

In many cases, explanations are only useful and necessary for a subgroup of the location products in an optimization run. For example, you can choose to see the explanations only for the non-deliveries for the most important products and/or customer locations. You can select the location products with a selection you have created in interactive SNP planning or you can enter them directly.
4. Level of Detail of the Explanation

You can specify how detailed you want the systems explanations to be. For example, the most detailed explanation would explain the non-delivery for each location product, period, and priority class. The least detailed explanation level

would explain the non-delivery for all location products in the entire explanation horizon. You can specify the following parameters: Level of detail: You specify how detailed you want the explanations to be. The options available are:

Aggregated explanations for all selected location products Aggregated explanations for all products in a location Aggregated explanations for a product in all locations Explanations for each location product

You have defined that you want the system to generate aggregated explanations for all selected location products. You see the explanation that a total of 8 hours of production capacity are missing for all selected location products. In this case, you cannot tell how much production capacity is necessary to remedy the missing quantity of a specific location product. To see this information, you must specify that you want the system to generate explanations for each location product.

Explanation horizon: You can enter a time frame for which you want the system to generate explanations.

Explanation for each period/priority class: You can specify whether you want the system to generate the explanation for each period and each priority class, or for the entire explanation horizon and not separately according to priority classes.

Discrete restrictions: You can specify whether or not you want the system to consider the discrete restrictions defined in the SNP optimizer profile or deployment optimizer profile when it runs a cause analysis.

Runtime: You can restrict the runtime of the explanation tool. If you have defined that the system also considers discrete restrictions (see above), we recommend that you restrict the runtime.

Optimization Run Termination


Use
You can use this function to terminate optimization runs in a gentle fashion, without interrupting current processes. It is particularly suited to runs that were

started interactively but can also be used for background runs. If you start an optimization run interactively, you might want to use this function in the following circumstances:
If you discover that you have defined a runtime that is too long and would like to perform a new optimizer run with a shorter runtime. If you can conclude from the messages or graphics displayed during the optimization run that the system has already found a solution but the optimizer continues the run, trying to improve on this solution, and you want to accept the solution that has already been found and terminate the run.

Prerequisites
You can only terminate optimization runs that you have started yourself. To terminate runs started by other users, you need system administrator authorization (authorization object S_RZL_ADM that must include authorization field ACTVT activity).

Features
1. If you terminate an optimization run, the system brings the run to a proper conclusion, which means that it saves all the data that has been determined by this point in time and creates a complete log. Any solutions found by this time are also saved and recorded in the log. The system makes regular checks to see if the user has terminated the optimization run. However, it might take some time before the system receives this information and terminates all the current processes. It is not possible to gently terminate the optimization run during its initial data collection (data reading) period.

2.

If it takes too long to terminate the optimization run with this function, you can also terminate the run immediately. If you do this, the system does not save any data from the current run and also terminates log creation immediately, which means that the log generated might be incomplete. You need system administrator authorization to perform this abrupt optimization run termination (see the Prerequisites).

Activities
Terminating an Optimization Run Gently
...

1. Follow this SAP APO Easy Access menu path: APO Administration Optimization System Monitoring Terminate Optimization Runs. 2. Select the optimization run you wish to terminate and choose with the quick info, Finish Optimization Run. 3. The system completes the data collection period if necessary, saves the data, and generates a complete log.

Terminating an Optimization Run Abruptly


...

1. Follow this SAP APO Easy Access menu path: APO Administration Optimization System Monitoring Process Overview. 2. 3. Choose with quick info, Display Optimizer Processes. Finish Process. Select the optimization run you wish to terminate and choose

4. The system terminates the optimization run and log generation immediately. It does not save any data.