Enable the Minimize Stockout Cost Feature
To effectively use the Minimize Stockout Cost feature, the known stockout costs should be specified in the following priority order:
• SKU
• Part
• Inventory Optimization Planning Parameter
• Service Group Parameter
After setting known stockout costs, if a SKU in Service Group does not have a stockout cost defined, it cannot be stocked. To avoid not stocking SKUs that do not have stockout costs defined, default stockout values are provided at the Service Group level.
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Setting stockout costs at the Service Group level is not the appropriate method for setting the actual stockout costs. The Service Group level is the default safety net when a known stockout cost is not defined at the SKU, Part, or Inventory Optimization Planning Parameter level.
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Use these steps to define known stockout costs and enable the Minimize Stockout Cost feature:
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Set at the SKU level
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Enter values for the following fields on the General tab of the SKU page for a specified SKU:
• Reference Stockout Unit Cost (Fill Rate)
• Stockout Unit Cost (Fill Rate) Currency
• Reference Stockout Unit Cost (Wait Time)
• Stockout Unit Cost (Wait Time) Currency
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Set at the Part level
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Enter values for the following fields on the Parts page for a specified Part:
• Reference Stockout Unit Cost (Fill Rate)
• Stockout Unit Cost (Fill Rate) Currency
• Reference Stockout Unit Cost (Wait Time)
• Stockout Unit Cost (Wait Time) Currency
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Set at the Inventory Optimization Planning Parameter level
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Do the following on the Inventory Optimization Planning Parameters page:
1. Create or Edit an Inventory Optimization Planning Parameter.
2. Enter values for the following fields:
◦ Reference Stockout Unit Cost (Fill Rate)
◦ Reference Stockout Unit Cost (Wait Time)
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Set at the Service Group Parameter level
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Do the following on the Service Group Parameter page:
1. Create or Edit a Service Group Parameter.
2. Select the Minimize Stockout Cost check box to enable the Minimize Stockout Cost feature.
3. Enter values for the following fields:
◦ Reference Stockout Unit Cost (Fill Rate)
◦ Stockout Unit Cost (Fill Rate)
◦ Reference Stockout Unit Cost (Wait Time)
◦ Stockout Unit Cost (Wait Time)
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