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Automatic Parameter Configuration for Inventory Management in SAP ERP/APO

David Bucher and Joern Meissner
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David Bucher: Department of Management Science, Lancaster University Management School,

No MRG/0017, Working Papers from Department of Management Science, Lancaster University

Abstract: Companies today generally hold several thousands SKUs (stock-keeping units) in stock. With an ever increasing trend towards highly customized products, the number of SKUs held by companies is likely to increase even more in the future. For each of the SKUs held in stock, a decision has to be made on how to configure each module of the SKU's inventory system. Doing this for each SKU individually seems to be an unfeasible task, given the large numbers of SKUs held in stock by most companies. Therefore, these companies configure inventory systems not on a SKU-basis but on a group basis, where the groups are usually determined using an ABC/XYZ analysis. The configuration using such a rough group basis for several thousand SKUs does not allow for individually customized inventory systems and therefore might not exploit the implemented inventory methods in a software package in an optimal way. In this research project, decision systems allowing an automated inventory system configuration in SAP ERP and SAP APO at the SKU-level are developed. The SAP ERP corporate software package is the market leader for Enterprise Resource Planning systems, offering a wide range of inventory methods for the relevant inventory system modules. The advanced planning and scheduling system of SAP, Advanced Planning and Optimization (APO), provides additional inventory methods that can be chosen for the configuration in the inventory system modules.

Keywords: material resource planning; SAP ERP/APO; inventory management; parameter configuration (search for similar items in EconPapers)
JEL-codes: C61 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-03, Revised 2010-03
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