Network inventory optimization

A new home for the Coupa Supply Chain documentation

Starting with Supply Chain 42, our documentation will be located on Coupa Compass. The help here will continue to be accessible for the foreseeable future, but will no longer be updated. If you need a Compass user account, contact your company’s Designated Support Contact (DSC).

You can access new and updated Supply Chain documentation in the following location on Compass:

https://compass.coupa.com/en-us/products/supply-chain-design-and-planning

Network inventory optimization

A site’s inventory consists of several components:

Safety stock - Inventory that ensures against unknown demand variability and variability in replenishment lead time.
Cycle stock - Inventory that is a result of transportation schedule.
Pre-build stock - Inventory that ensures against known demand variability.

Network Optimization optimizes the cycle stock and the pre-build stock.

Inventory is categorized into:

After Network Optimization is complete and the network structure is applied to a model, you can run Safety Stock Optimization. Safety Stock Optimization optimizes the safety stock, which is the additional quantity of each product that is to be held in inventory when an order is placed to account for unknown variations in demand and lead times.

Output verification

After Safety Stock Optimization calculates a safety stock value for each product and each time period at each site, you can check the calculated values. To do this, plug the safety stock values that were output from Safety Stock Optimization into the Inventory Policies, and then run Simulation based on the complete set of values. By running the simulation, you can confirm the appropriateness of the safety stock values placed on each of the facilities.

Last modified: Friday May 12, 2023

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