Delay tolerance (negative days)

The delay tolerance functionality enables Planning Optimization to consider the Negative days value that is set for coverage groups. It's used to extend the delay tolerance period that is applied during master planning. In this way, you can avoid creating new supply orders if existing supply will be able to cover the demand after a short delay. The purpose of the functionality is to determine whether it makes sense to create a new supply order for a given demand.

Turn on the feature in your system

To make the delay tolerance functionality available in your system, go to Feature management, and turn on the Negative days for Planning Optimization feature.

Delay tolerance in Planning Optimization

Delay tolerance represents the number of days beyond the lead time that you're willing to wait before you order new replenishment when existing supply is already planned. Delay tolerance is defined by using calendar days, not business days.

At the time of master planning, when the system calculates the delay tolerance, it considers the Negative days setting. You can set the Negative days value on either the Coverage groups page or the Item coverage page.

The system links the delay tolerance calculation to the earliest replenishment date, which equals today's date plus the lead time. The delay tolerance is calculated by using following formula, where max() finds the larger of two values:

max(Earliest replenishment date, Demand due date)Demand due date + Negative days

This formula ensures that master planning doesn't create new supply orders when enough supply exists during the product lead time.

Note

The delay tolerance calculation in Planning Optimization always uses the dynamic negative days calculation from built-in master planning. The Use dynamic negative days setting on the Master planning parameters page has no effect on this behavior.

If the existing supply implies a demand delay that is less than or equal to the calculated delay tolerance, Planning Optimization pegs existing supply with the demand. In some cases, it's better to delay the demand than to end up with oversupply.

The following subsections provide examples that show how delay tolerance affects the creation of planned orders in Planning Optimization.

Example 1

A product has the following configuration:

  • Lead time: 10
  • Negative days: 2

The following supply and demand exist for the product:

  • Demand for today: A sales order for a quantity of 10
  • Supply in 12 days: A purchase order for a quantity of 10

Existing supply can cover the demand within 12 days, and that period equals the delay tolerance. Therefore, when master planning runs, no planned orders are created.

Example 2

A product has the following configuration:

  • Lead time: 10
  • Negative days: 0

The following supply and demand exist for the product:

  • Demand for today: A sales order for a quantity of 10
  • Supply in 12 days: A purchase order for a quantity of 10

Existing supply can cover the demand only after 12 days. However, the delay tolerance is 10 days. Therefore, when master planning runs, a planned order for a quantity of 10 is created.

Example 3

A product has the following configuration:

  • Lead time: 10
  • Negative days: 2

The following supply and demand exist for the product:

  • Demand in 11 days: A sales order for a quantity of 10
  • Supply in 14 days: A purchase order for a quantity of 10

Existing supply can cover the demand only after three days. However, the delay tolerance is two days. (In this case, the delay tolerance includes only the two negative days. The demand date isn't included because it's after the product lead time.) Therefore, when master planning runs, a planned order for a quantity of 10 is created.