Exhibit B: Demand Netting Logic

The net demand calculation depends on which planning period option you selected when requesting a master schedule generation.  If you selected the weekly planning period option, consumable demand is compared with projected demand.  The larger of the two figures is used as net demand, provided the weeks occur after the demand fence date; otherwise, consumable demand is used as net demand.

If you selected the monthly planning period option or by planning periods period option , a more complicated netting process is used.  The projected demand is allocated over the number of weeks in the month or period.  For each week, the consumable demand is compared with the remaining projected demand allocated to that week, and the larger of the two is used as net demand, provided the months or periods fall after the demand fence date;, otherwise, consumable demand is used as net demand.

This example illustrates how the system calculates the net demand for monthly or planning period masks.

Example

Assumptions:

·     A four-week period

·     Each week contains 5 working days

·     Total projected demand for the period is 2000; thus initial demand for each week is 500 (2000/4)

1.   For a period with no consumable demand, net demand would look like this if the four weeks were after the demand fence date.

Since there is no consumable demand in the period, the projected demand for each week is used as the net demand.

2.   For a period with no consumable demand, net demand would look like this if the four weeks were before the demand fence date.

Because there is no consumable demand in the period, the net demand becomes zero.

3.   For a period with consumable demand, where total consumable demand is less than total projected demand, the net demand would look like this assuming the four weeks were after the demand fence date.

This is calculated as follows:

a.   The projected demand for the week is initially set at 500 and compared with the consumable demand for the four weeks in the period:

b.   In two cases (weeks 2 and 4) consumable demand is greater than projected demand.  Therefore, net demand is set to the consumable demand:

c.   These amounts are subtracted from the total projected demand, leaving 400 (2000 - 750 - 850 = 400).  This amount is allocated over the remaining two weeks (weeks 1 and 3), giving 200 per week:

d.   Because in weeks 1 and 3 the consumable demand is less than the allocated projected demand, the net demand is set to the projected demand:

4.   For a period with consumable demand where total consumable demand is greater than total projected demand, net demand is set to the value of consumable demand whether the weeks are before or after the demand fence date.

Related

• Partial Week Processing