SapHelp Optimization3

OPTIMIZATION
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Supply Network Planning Run
Comparison of the Planning Methods
Optimization-Based Planning
Application Examples for the SNP Optimizer
Finite Capacity Planning
Source Determination (Optimizer)
Consideration of Incoming Quota Arrangements
Lot Size Planning
Stock Planning
Optimization Profiles
Decomposition
Running the Optimizer from the Interactive Planning Desktop
Definition of Time-Based Constraints in Interactive Planning
Running the Optimizer in the Background
Automatic Cost Generation
Definition of the Business Goals
Costs Maintenance
Prioritization of Customer Demands and Demands with High Volume
Penalty Cost Group Profile
Sequence-Dependent Lot-Size Planning
Cross-Period Lot Size Planning

Application Logs for Optimizers
Optimization Input Log
Resulting Costs of Optimization
Result Indicators
Explanation of the Optimization Results
Configuration of the Explanation Tool
Optimization Run Termination
Supply Network Planning Run

Use
You can use any of the following planning methods to perform the planning run in Supply Network
Planning (SNP):
• Optimization-Based Planning
• Heuristic-Based Planning
• Supply and Demand Propagation
You can run optimization-based and heuristic-based planning interactively from the interactive planning
desktop in Supply Network Planning or you can run them in the background. You run supply and demand
propagation in a dedicated planning book in interactive Supply Network Planning.
Based on these planning methods, SNP supports special planning processes, such as:
• Aggregated Planning
• Planning with Aggregated Resources
• Product Interchangeability
• Procurement Scheduling Agreement in Heuristic-Based SNP Planning
• Subcontracting with Source Location in SNP
• Subcontracting with Third-Party Provision of Components in SNP
• Direct Delivery from Production Plant to Customer
For detailed information about the individual planning methods and processes, see the related sections of
this documentation.
Your individual planning environment influences which planning method would be the most suitable for
your requirements. For a comparison of the heuristic and optimization planning methods with Capable-to-
Match (see below), see Comparison of the Planning Methods.
See also
Capable-to-Match planning (CTM) is an alternative to the optimization-based or heuristic-based planning
methods from Supply Network Planning. For more information, see the Multilevel Supply and Demand
Matching section of the SAP APO documentation.
This topic compares the planning methods of Supply Network Planning (SNP), optimization-based planning and
heuristic-based planning, as well as the Capable-to-Match (CTM) planning method. For more information, see
Optimization-Based Planning, Heuristic-Based Planning and Capable-to-Match (CTM).
We recommend that you use optimization-based planning or CTM planning if one of the following conditions
applies to you:
• Your business environment is subject to strict constraints (for example, you must take into account
production capacities, transportation capacities, storage capacities, and/or handling capacities)
• You have alternative production locations and sources of supply (locations, production process models, and
external procurement relationships)
• You can decide between early production and late production
• You share resources, meaning that multiple products are produced simultaneously on one resource
If you wish to plan on an infinite basis (meaning that you do not wish to consider capacities) for the medium to
long-term horizon, we recommend that you use heuristic-based planning. If you wish to plan or fulfill demands on
the basis of priorities, we recommend that you use CTM planning.
The following table describes the main features of each planning method:
Business Environment
Heuristic and Capacity

Area Capable-to-Match Optimizer
Leveling
• To create a
feasible plan
To create a feasible plan with minimum
Business To create a feasible plan with few
by fulfilling the highest costs
Objective bottleneck resources
priority demand first
To maximize
•
profits
Demand can be
Prioritized demand and
Demand aggregated for three
Not relevant demand-specific supply
Type demand classes or by
strategies
customer locations
Capacity • Heuristic run: Based on Finite capacity planning Finite or infinite
the assumption that (taking capacity capacity planning
capacity is infinite constraints into account)
(infinite capacity or a simulation of infinite
planning) planning
• Capacity leveling: This is

Leveling
a step following on from

the heuristic run to level
capacities
Planning Bucketed or continuous
Bucketed (period-based) planning Bucketed planning
Approach planning
Constraints and Business Scenarios

Leveling
• Production • Production
• Production
• Transportation • Transportation
• Transportation
Resources • Storage
• Handling
• Handling
(heuristic only) • Handling
Can use absolute target
Flexible definitions for the
stock levels or target days'
heuristic but capacity Can use absolute target
Target Stock supply for planning. The
leveling does not consider stock levels or target days'
Levels optimizer calculates the
the target stock level supply for planning
target days' supply before
method specified
the actual optimization run
• Considers lot sizes
for production and
transportation
• Considers cross-
period lot sizes for
Considers lot sizes for Considers lot sizes for
production
Lot Sizes production, transportation, production, transportation,
and procurement and procurement
• Transportation lot
sizes have to be
used to map lot
sizes for
procurement
• Cost-based
Based on priority, costs sourcing decisions
Source Based on quota
(PPM/PDS and
Determination arrangements and
transportation), or quota • Can be used to
(sourcing) priorities
arrangements modify quota
arrangements
Time-Based
Production Considered Considered Considered
Parameters
Leveling
Considers material Can consider material
Material staging is not a
constraints; external constraints for externally
Material constraint. A backlog is
products are not planned planned products or by
Constraints created for externally
and do not represent a setting a high procurement
planned products
material constraint cost for procured products
Supply You can define supply
Not supported Not supported
Categorization categories
1:1 - Supports
Supersession 1:1 - Supports 1:1 - Supports
supersession (forward
and supersession (supersession supersession (supersession
interchangeable
Discontinuation chains and form-fit- chains and form-fit-
supersession chains and
of Products function classes) function classes)
form-fit-function classes)
Supports aggregation
planning and
Supports aggregation disaggregation. You can Supports aggregation
Aggregated
planning and also choose to aggregate planning and
Planning
disaggregation demands and supply on a disaggregation
time basis or by order
types for product
Maximum Stock
Levels by Not considered Not considered Considered as a constraint
Product
Push
Distribution
Not supported (but is Supported by supply Can be controlled using
Stock to
supported by deployment) distribution storage costs
Downstream
Locations
You can define a
minimum available
Minimum capacity for a resource and
Can consider minimum
Resource Not supported assign costs for falling
receipt quantities
Utilization below this minimum level
(this only applies to
production resources)
Does not make a Does not make a
Can make a distinction
Resource distinction between distinction between
between standard and
Capacity standard and extended standard and extended
extended capacity
capacity capacity
Demand can be
Capacity leveling does not
Demand Demand can be sorted by aggregated for three
recognize demand
Prioritization different sort criteria demand classes or by
priorities
customer locations
Shelf Life Not considered Can consider shelf life • Can consider shelf
Leveling
life constraints in a
constraints in a restricted restricted way (see
way (for example, CTM SAP note 579556)
does not consider shelf
life propagation). • Batches are not
recognized
Supported (the Supported (the Supported (the
Subcontracting subcontractor has to be subcontractor has to be subcontractor has to be
modeled as a location) modeled as a location) modeled as a location)
Scheduling
Agreement Supported Not supported Not supported
Processing
Configuration

Leveling
• Locations
• Products
• Locations
• Resources (single-
• Products
• Locations mixed or
• Resources (single-
• Products multimixed, and
mixed or
• Resources (single- bucket resources)
multimixed, and
mixed, • PPMs and PDS
bucket resources)
multimixed, and (SNP and PP/DS,
Relevant Master • PPMs and PDSs
bucket resources) but some
Data (SNP)
• PPMs and PDSs restrictions)
• Transportation
(SNP) • Transportation
lanes
lanes
• SNP optimizer
• Transportation
profile
lanes • CTM profile
(supply profiles,
• Optimizer costs
demand profiles,
and so on)
Flexibility of Macros can be used to You can modify aspects • Has a user
Algorithm modify heuristic values of the calculation by function for
that are entered changing profile settings modifying the
and maintaining optimizer input
parameters log
• Macros can be
used to modify
optimizer values
Leveling
that are entered

After you have After you have
After you have fine-tuned
configured the configured the
Daily Operation the costs, the optimizer
parameters, the heuristic parameters, CTM can run
can run automatically
can run automatically automatically
• Transparent
results based on
priorities. The
analysis
complexity is
• Requires some
governed by the
• Transparent understanding of
supply chain
results cost trade offs
complexity
Comprehensibility • Order tracking by
• Explanation of • Cost summaries
pegging
planning results are available after
• Graphical
by the system the optimization
representation of
run
results
• Explanation of
planning results
by the system
• Bucketed plans
need to be
• Bucketed plans converted into
need to be continuous plans
Bucketed plans need to converted into
Integration with
be converted into continuous plans • Recognizes
PP/DS
continuous plans material flow,
• Continuous plans capacity
can be created consumption, and
setup statuses
from PP/DS
• Have to replan all
demands
Supported - with options
Net Change
Supported for dynamic and fixed • Can use the SNP
Planning
pegging optimization
bound profile to
restrict replanning
Purpose
The SNP optimizer offers cost-based planning. This means that it searches through
all feasible plans in an attempt to find the most cost-effective (in terms of total
costs). Total costs refers to the following:
• Production, procurement, storage, and transportation costs

• Costs for increasing the production capacity, storage capacity, transportation capacity, and
handling capacity
• Costs for violating (falling below) the safety stock level
• Costs for late delivery
• Stockout costs
You use the SNP cost profile to fine-tune the relative importance of different cost
types.
In the optimizer view, a plan is feasible when it satisfies all the Supply Chain Model
constraints that you set in the SNP optimizer profile. A feasible solution might
involve due date or safety stock constraint violations. Due dates and safety stocks
are Soft Constraints (constraints to which you assign violation costs). The optimizer
only proposes a plan that will violate soft constraints if, according to the costs
specified in the system, it is the most cost-effective plan.
The optimizer makes sourcing decisions within optimization-based planning. This

means that it uses costs as a basis for deciding the following:
• Which products are to be produced, transported, procured, stored, and delivered and in which
quantities (product mix)
• Which resources and which production process models (PPMs) or production data structures
(PDSs) to use (technology mix)
• The dates and times for production, transportation, procurement, storage, and delivery
• The locations for production, procurement, storage, delivery, and the source and destination
locations for transportation
Since you can enter PPMs or PDSs with fixed resource consumption in master data,
you can also include setup operations in Supply Network Planning. Therefore, you
can also use the SNP optimizer for lot size planning. The optimizer also supports
cross-period lot size planning where orders are grouped into large lots due to high
set up costs.
The optimizer uses the linear programming method to take account of all planning-
problem-related factors simultaneously within one optimal solution. As more
constraints are activated, the optimization problem becomes more complex, which
usually increases the time required to solve the problem. As a rule, you should run
optimization as a background job.
The optimizer makes a distinction between continuous linear optimization problems
and discrete optimization problems.
Linear Optimization
You can choose one of the three following methods in the SNP optimizer profile to
solve continuous linear optimization problems:
• Primal simplex method

• Dual simplex method
• Interior point method
All three methods arrive at an optimal solution. Runtime could be the main
influencing factor when deciding which of these methods to use. However, there is
no general rule for selecting the best method for a given problem (apart from to
test each method individually). A good way of assessing the application is to do a
benchmarking based on a test scenario. This is because the optimal choice of
method depends more on the structure of the supply chain and less on the input
data. Therefore, in a productive environment, daily benchmarking is not necessary.
Discrete Optimization
A problem is not continuous (and is therefore discrete) in Supply Network Planning,
when the model contains:
• Discrete (integer-value) lot sizes for transportation or PPMs/PDSs

• Discrete means of transport
• Discrete increase of production capacity
• Minimum lot sizes for transportation or PPMs/PDSs
• Piecewise linear cost functions for transportation, production, or procurement
• Fixed PPM/PDS resource consumption
• Fixed PPM/PDS material consumption
• Cross-period lot size planning
If you want the optimizer to consider any of the above constraints, you must use
one of the discrete optimization methods from the SNP optimizer profile.
The piecewise linear cost function that you can define in master data makes a
distinction between the convex cost function (cost per unit increases for higher
volumes; for modeling overtime or night shifts for instance) and the concave cost
function (cost per unit decreases for higher volumes; for modeling freight rates for
instance).
Convex cost functions do not complicate the planning problem and can be solved
efficiently. However, they can also be modeled using alternative modes without
using piecewise linear cost functions.
• • Mode 1 with $50 per unit and a limited capacity of eight models
• • Mode 2 with $100 per unit and a limited capacity of six models
• • Convex functions of labor cost per day, assuming eight normal

working hours and a maximum of six hours of overtime paid at double
time
In contrast, concave piecewise linear cost functions cannot be solved by an LP

solver but only by using discretization methods (mixed integer linear programming).
If piecewise linear functions are modeled but the optimizer is run without
discretization or the discretization horizon is smaller than the planning horizon, the
optimizer takes into account the linear cost function defined in addition to the
piecewise linear cost function.
The discrete optimization method cannot be used with strict prioritization (see below).
Using the discrete optimization method can significantly increase runtime requirements.
Note that Supply Network Planning is a medium-term planning function and its focus should
not be on solving integer problems (that is, using the discrete optimization method).
Prioritization
The optimizer can differentiate between the priority of sales orders and forecast
demand. With strict prioritization, sales orders always have priority 1, the corrected
demand forecast priority 5, and the demand forecast priority 6. Within every priority
class, the system uses all available cost information to determine the final solution.
When cost-based prioritization is used, the optimizer uses penalty cost information
from the product master data (the SNP1 tab page) to determine the optimal
solution.
Decomposition
You can use the decomposition methods, defined in the SNP optimizer profile, to
reduce runtime and memory requirements for optimization. Decomposition may
also represent the only way for the optimizer to find a feasible solution in the event
of large discrete problems. For more information, see Decomposition.
Aggregated Planning - Vertical

To reduce the size of the model to be optimized, the optimizer can restrict planning
to location product group level (assuming you have defined the demands at the
lower level). Plans are distributed to lower level products based on demand for the
lower level products. To plan at product group level, you must define hierarchies for
products and locations in the hierarchy master. This data is used to generate the
location product hierarchy. You also must define the PPMs or PDSs for the product
groups and create the PPM or PDS hierarchy in the hierarchy master. In the SNP
optimizer profile, if you set the Aggregated Planning - Vertical indicator, the
products are automatically aggregated to the relevant groups for planning and after
planning is complete, they are disaggregated again.
Aggregated Planning - Horizontal
This function allows you to plan a subset of your supply chain. You can limit the
products or locations to be taken into account during the optimization run. For
example, if optimization is only run to plant level but forecasts are at customer
level, the optimizer can sum (aggregate) the demands to plant level and use this
value during the optimization run. The transportation times, for example, from the
plant to the distribution center and to the customer, as well as the duration of the
PPMs or PDSs, are also taken into account.
Incremental Optimization
Incremental optimization is the name given to optimization-based planning that is
run for only part of the model or on the basis of an already existing plan. The plan
might be infeasible with this type of optimization since the optimizer cannot plan
receipts for shortages that are the result of fixed orders from previous planning
runs. It is also possible that the optimizer will ignore input products (and associated
stock) that are defined in PPMs/PDSs or products that are available for procurement
at a source location using a transportation lane (source location products).
To prevent this, you can specify in the SNP optimizer profile that the optimizer is to
take into account the stocks of non-selected input products or source locations
products. You can also specify that the dependent demand and distribution demand
of fixed orders is to be treated as an independent requirement, meaning that the
optimizer will permit shortages subject to the calculation of penalty costs for not
delivering. You define penalty costs for not delivering for customer demand, the
demand forecast, and corrected demand forecast in the product master data. You
can also set that the optimizer is to consider the dependent demand and
distribution demand of fixed orders, and the stocks of non-selected input products
or source location products as a pseudo-hard constraint. This means that shortages
are possible but are subject to the calculation of infinitely high penalty costs that
are internally defined in the optimizer. Setting this ensures that the optimizer will
only permit shortages if it cannot find any other feasible solution.
Process Flow
...
1. You run the optimizer.

2. You run deployment.
3. You run the TLB.
The Optimization Run
Note: The optimizer plans all distribution demands for all locations in the
distribution network before exploding the BOM and processing dependent demand
at the production locations.
Factors Considered During the Run

• Valid transportation lanes
• Lead times
• Transportation capacity
• Transportation costs
• Handling capacity
• Handling costs
• Production capacity
• Production costs
• Storage capacity
• Storage costs
• Time stream (location master data)
• Lot size (minimum, maximum, and rounding value)
• Scrap
• Alternative resources
• Penalty costs for not fulfilling demand (supply shortage)
• Safety stock violation penalty costs
• Procurement costs
• Shelf life
• Cost multipliers
• Location Products
• Fixed PPM/PDS resource consumption
• Fixed PPM/PDS material consumption
Other Considerations
• The optimization run results do not include pegging orders back to the original individual
requirements because requirements are bucketed.
• Since orders are not pegged back to the individual requirements, Supply Network Planning does
not support order-based planning. After the optimization (or heuristic) run, it is not possible to
determine information about links between specific planned orders and original sales orders
(however, CTM can provide exactly this information by tracking orders).
• The optimizer considers the entire capacity and the entire alternative capacity that is globally
available (at all locations).
• In the event of a capacity overload, the optimizer, depending on the system settings, either does
not provide a solution or increases the capacity based on a penalty cost calculation.
• The optimizer considers all active types of capacity constraints, including transportation,
production, handling, and storage constraints. The settings in the SNP optimizer profile govern
whether or not a constraint is active.
• The optimizer takes into account the shelf life of products in a restricted fashion (for more
information about this, see Stock Planning).
See also:
Running the Optimizer from the Interactive Planning Desktop

Below is a list of examples showing where you can use the SNP optimizer within
production planning and distribution resource planning and what you should keep in
mind:
1. • Finite Capacity Planning

2. • Source Determination (Optimizer)
3. • Lot Size Planning
4. • Stock Planning
Finite Capacity Planning
Purpose
It is particularly advisable to use the SNP optimizer to plan capacities as finite if you
have limited business resource capacities and these limited capacities have an
impact on your production planning and distribution resource planning. By already
planning capacities as finite in Supply Network Planning (SNP), you can take
capacities into account and make it easier for the subsequent detailed scheduling
(such as SAP APO Production Planning and Detailed Scheduling, PP/DS) to create feasible
plans.
Furthermore, by using the SNP optimizer to plan finite capacities, you can include a
possible extension of your capacities into your plan, subject to the calculation of
additional costs.
You can use the SNP optimizer to plan the following resource categories and types
as finite:
• Resource categories:
•  Production resources
•  Transportation resources
•  Handling resources
•  Storage resources
• Resource types:
•  Single-mixed and multimixed resources
•  Bucket resources
Integration
The SNP optimizer takes into account the net available capacity only, meaning that
it checks whether the capacity available in SNP is already being used by other
system application areas (PP/DS, deployment, or the Transport Load Builder, for
example) or by fixed SNP orders.
For single-mixed and multimixed resources, the SNP optimizer subtracts the
capacity consumed by PP/DS, for instance, from the capacity available in SNP. If the
capacity consumed by PP/DS exceeds the aggregated available capacity in a bucket
in SNP, the optimizer assumes that there is an available capacity of 0 in the
corresponding bucket and plans no further capacity consumption in this bucket.
Prerequisites
The prerequisites for finite capacity planning are the same as those for general
optimization-based planning:
1.• Planning Area Administration

• Master Data Setup for the Optimizer
• Model/Version Creation
• Supply Chain Model Setup
• Release of the Demand Plan to SNP
Features of Finite Capacity Planning

General Information
2.• Generally, the SNP optimizer takes into account all model constraints simultaneously. This
means that the optimizer takes into account the available capacity of all resources at the same
time. Thus, during multilevel production, for example, all the manufacturing levels are
incorporated simultaneously into planning.
In the SNP optimizer profile, you can set which capacity constraints (production
capacity, transportation capacity, handling capacity, or storage capacity) you
want the optimizer to take into account.
3.• The optimizer determines the available capacity based on the defined factory calendar,
meaning that it only uses days defined as workdays to determine the bucket capacity.
4.• You can define multiple capacity variants for resources and label these as the minimum,
normal, or maximum available capacity. Thus, you can let the optimizer decide to increase
capacity or fall below the minimum capacity subject to the calculation of additional costs. Since
the optimizer generally chooses the solution with the lowest costs, it will only increase capacity
or fall below the minimum if this course of action is the most cost-effective total solution despite
the additional costs.
You define the costs for the capacity variants with minimum, normal, or
maximum capacity in the quantities/rate definition or the capacity profile of the
resource master data. To set the status indicator, go to the resource initial
screen and choose: Current Settings -> Capacity Variants (see also, Master Data
Setup for the Optimizer).
Note that the optimizer takes into account the minimum available capacity and
the costs you defined for a capacity variant with the status Normal Capacity only
for production resources.
Production Resources
Capacity Consumption
5.• The SNP optimizer takes into account the capacity consumption of a production resource,
which you define in the production process model (PPM) mode. One PPM can load several
resources and one resource can be loaded by several PPMs. The duration of an SNP PPM
(that is, the sum of the duration of all PPM activities) is fixed. It has no influence on resource
consumption and instead is used only for scheduling within the PPM.
The resource consumption defined per activity is distributed evenly over the
length of the activities. This means that the optimizer ignores the consumption
type defined for the activity and always assumes that consumption is continuous
(consumption type C).
6.• If you use the linear optimization method, the optimizer only takes into account the variable
resource consumption defined in the PPM. If you want the optimizer to also take into account
fixed resource consumption, you have to choose discrete optimization in the SNP optimizer
profile and define a discretization horizon for the Fixed Material and Resource Consumption.
This is necessary if, for instance, you want to use fixed resource consumption to model setup
times during lot size planning with the SNP optimizer (see also, Lot Size Planning).
Note that the optimizer ignores the fixed resource consumption defined in the PPM if you
choose the linear optimization method in the SNP optimizer profile. However, fixed
resource consumption is taken into account if orders are created in liveCache during
planning. This can cause a resource overload to be displayed in the capacity view of
interactive Supply Network Planning. Therefore, if you want the optimizer to take into
account the fixed resource consumption, choose discrete optimization or do not define a
fixed resource consumption in the PPM.
If you are running an integrated SNP and PP/DS planning and set the Lot Size Planning:
Not Cross-Period indicator in the SNP optimizer profile (the Integration tab page), fixed
resource consumption is not taken into account when creating SNP orders in liveCache if
there is already an existing PP/DS order for the associated PP/DS PPM (see also the F1
help at the indicator). This also applies for Cross-Period Lot Size Planning if you set the
accompanying Cross-Period Lot Size Planning indicator.
7.• The optimizer also takes into account time-based resource consumption that you defined in
the PPM. You can use time-based consumption to model varying consumption levels over the
course of the bucket. For example, you could include the following information in your plan: A
machine consumes more lubricant at the beginning of production than it does towards the end.
Available Capacity
8.• For the maximum available capacity variant of production resources (see above), you can
define that the optimizer is permitted to either increase the capacity by this variant’s entire
available capacity (an entire layer, for example), or not increase it at all. In this instance, the
optimizer either takes into account the entire costs of the increase or no costs at all. In the SNP
optimizer profile, choose the discrete optimization method and define a discretization horizon in
the Discrete Production Capacity Increase field.
Capacity Costs
9.• You can also define time-based costs for increasing the capacity of production resources. For
a daily planning buckets profile, you can define that the increase costs more on a Monday than
it does on a Tuesday, for example.
10. • You also have the option of defining costs for the normal capacity variant (standard
capacity) for production resources. You can specify these costs (also on a time basis) per
capacity unit and bucket. The costs incurred are proportional to the resource usage.
11. • If you wish to define a minimum available capacity (see the General Information section),
you have to define costs for falling below it. You can also specify these costs for each capacity
unit and bucket. The costs incurred are proportional to the amount fallen below the minimum
available capacity.
Constraints
12. • Since you can only create one mode per activity in the SNP PPM, you cannot define any
alternative resources for a production activity. To define alternative resources, you must create
one PPM per mode combination. You can use the SNP PPM Generation With Lot Size
Margin function to generate SNP PPMs automatically for multiple PP/DS PPM mode
combinations.
Transportation Resources
13. • The SNP optimizer only takes into account the means of transport’s variable capacity
consumption (per day) that you specified in the Consumption field of the Product-Specific
Means of Transport section. You specify consumption for the product that is defined in this
section. Consumption is dependent on the transportation duration. If the transportation duration
is 0, no resource consumption exists.
If you do not enter a value in the Consumption field or do not define any data for
the Product-Specific Means of Transport, the optimizer calculates consumption using
the conversion factor for units of measure that you specified on the Units of
Measure tab page in product master data.
Available Capacity
14. • You can assign transportation resources to multiple transportation lanes and so limit the
transportation capacity on these transportation lanes. To do this, specify a transportation
resource in the Resource field of the Means of Transport section in the transportation lane.
15. • In the SNP optimizer profile, you can set that you want the available means of transport to
be treated as discrete (in non-divisible integer numbers). If you do this, the means of transport
is treated as discrete for each transportation lane. You define the capacity of the means of
transport in the Transp.Res.Size field of the resource master data.
You can use this option to model the means of transport that are available in
your company (a truck, for example). However, if you commission external
transportation service providers, considering means of transport as discrete is
not relevant for you.
Capacity Costs
16. • The transportation costs considered by the optimizer consist of the product-specific
transportation costs (that is, the transportation costs you entered in the Product-Specific Means
of Transport section in the transportation lane) and the transportation costs for the means of
transport (that is, the transportation costs entered in the Means of Transport section). The
means of transport costs are dependent on the transportation resource consumption of all the
products transported on the transportation lane and the distance that was defined for the
transportation lane between the start location and destination location.
17. • You can define the means of transport costs either as costs per transportation resource unit
or as costs per means of transport. For the costs per transportation resource unit, you do not
define a size for the transportation resource. However, for the costs per means of transport, you
do define a size (5 t, for example) and set the Integral Means of Transport indicator in the SNP
optimizer profile, if required (when activating this indicator, you must also choose the discrete
optimization method in the SNP optimizer profile).
If, for instance, you want to model discount scales for the costs per
transportation resource unit option, you can use cost functions. Cost functions
are most appropriate when you are working together with external
transportation service providers.
Handling Resources
18. • You can assign handling units to a location (on the Resources tab page) as handling-in
resources or handling-out resources in location master data. The handling-in resource is loaded
by inbound shipments (SNP stock transfers) and external procurement during the goods receipt
processing time and the handling-out resource is loaded by outbound shipments during the
goods issue processing time.
19. • You can define the capacity consumption of the handling-in and handling-out resources for
the respective location product in location product master data (on the GR/GI tab page).
Resource consumption refers to the handling operation and is therefore proportional to quantity
but not time.
Constraints
20. • You can define a maximum of one handling-in resource and one handling-out resource per
location.
Storage Resources
21. • The optimizer takes into account the capacity consumption of the storage resource that you
define for the respective location product in location product master data (on the GR/GI tab
page).
Available Capacity
22. • The optimizer considers the storage capacity constraint as a soft constraint that can be
violated by the optimizer, subject to the calculation of penalty costs. These penalty costs are
assigned by the optimizer, which means that you cannot set them in the master data.
Storage capacity is a soft constraint due to the integration between Supply
Network Planning, PP/DS, and SAP R/3. There might be initial on-hand stocks or
fixed material receipts (from PP/DS, for example) because of this integration that
cannot be reduced within a bucket and exceed the storage capacity. To be able
to find a solution, the optimizer must be allowed to violate the storage capacity
and incur penalty costs. However, due to the high penalty costs incurred, the
optimizer will always try not to exceed the storage capacity.
23. • In contrast to other resource categories, the available capacity of the storage resource is
not aggregated by bucket. The optimizer always takes into account the capacity that is
available on the final day of a bucket.
For the storage resource, we recommend that you choose a factory calendar
with no non-working days. If the final day of a bucket were a non-working day,
the optimizer would assume an available capacity of 0.
24. • In addition to the storage resource capacity, you can define a product-specific upper bound
for on-hand stock in the location product master. The optimizer takes this upper bound into
account if you set the Maximum Product-Specific Quantity Stored indicator in the SNP optimizer
profile. The optimizer considers this a soft constraint, meaning that it can be violated subject to
the calculation of penalty costs. These penalty costs are assigned by the optimizer, which
means that you cannot set them in the master data.
You can also define a time-based upper bound for stock. For more information
about this, see Definition of Time-Based Constraints in Interactive Planning.
Constraints
25. • You can assign a maximum of one storage resource to each location.
See also:
For more information about optimization-based planning and its execution, see:
26. • Optimization-Based Planning

• Running the Optimizer in the Background
27. • Running the Optimizer from the Interactive Planning Desktop
Source Determination (Optimizer)

Purpose
If your company has alternative source of supply options with different costs, you
can use the optimizer in Supply Network Planning (SNP) to solve the following
issues:
• Where to produce, procure, store, and deliver (for example, it can decide whether to use in-house
production or external procurement)
• Which products and product quantities to produce, transport, procure, store, and deliver (product
mix)
• Which resources and which production process models (PPMs) or production data structures
(PDSs) to use (technology mix)
• The dates and times for production, transportation, procurement, storage, and delivery
• Which locations to transport from and to (for example, production plant-> distribution center or
distribution center -> customer)
The SNP optimizer bases its decisions about sources of supply on costs. The
optimizer uses the following as possible sources:
• Transportation lanes
• PPMs/PDSs
Moreover, you can define that the SNP optimizer is to taken into account incoming,
time-dependent quota arrangements. You define penalty costs for the violation of
quota arrangement values that the optimizer also takes into account during source
of supply determination. For more information, see Consideration of Incoming
Quota Arrangements.
The main purpose of optimized source determination using the SNP optimizer is to
define the production locations in such a way as to reduce the number of stock
transfers and associated stock transfer costs.
Constraints
The optimizer does not take into account external procurement relationships as
sources of supply; that is, no scheduling agreements, contracts, nor purchasing info
records. If you have assigned a means of transport to the transportation lane
generated from the external procurement relationship, the optimizer takes this
transportation lane into account. However, the optimizer does not create any orders
for scheduling agreements or contracts during planning (it only takes into account
existing orders as fixed orders).
Prerequisites
The prerequisites for source determination are the same as those for general
• Set Up of Planning Area

• Set up of Master Data for the Optimizer
• Creation of Model Name and Version
• Set Up of Supply Chain Model
• Release of Demand Plan to Supply Network Planning
Using Costs to Control Source Determination

Since the SNP optimizer simultaneously takes into account all the conditions of a
model to determine an optimal (most cost-effective) solution, it is generally only
possible to influence its choice of sources by using costs. For example, you can use
costs to prioritize sources by reducing the production costs at your preferred
location. However, remember that the optimizer always takes all influencing factors
into account:
• Using Production Costs to Prioritize Production Resources

You can influence the optimizer’s decision regarding which location and
resources to use for production by defining corresponding production costs in
the PPM/PDS. For example, if you want to define priorities for three different
PPMs/PDSs, you can specify the lowest production costs for your highest priority
PPM/PDS, higher costs for the PPM/PDS with medium priority, and the highest
costs for the PPM/PDS with lowest priority. To do this, define single-level
production costs or a cost function in the PPM/PDS.
Note however that in addition to taking into account production costs when
making its decision, the optimizer considers the costs for storing the PPM/PDS
products and the available capacity of the resources required for the PPM/PDS.
• Using Transportation Costs to Prioritize the Procurement Location
You can influence the optimizer’s decision regarding which locations to procure
from, by defining corresponding costs in the transportation lane. For example, if
you want to define the priorities of two different procurement locations, enter
lower transportation costs for the transportation lane of your preferred location
than those for the other transportation lane. Transportation costs consist of the
means of transport costs (costs from the Means of Transport section of the
transportation lane) and the product-specific means of transport costs (from the
Product-Specific Means of Transport section).
Note however that in addition to taking into account transportation costs when
making its decision, the optimizer also considers other influencing factors, such
as the storage costs and production costs of the location.
System Action if Source Cannot Be Found

If there is no valid transportation lane for procurement type F (external
procurement), the system creates an SNP stock transfer with no reference to a
source of supply. If there is no valid PPM/PDS for procurement type E (in-house
production), the system’s behavior is governed by whether or not the SNP: No
Planned Order indicator has been set in the planning version. If this indicator is set,
the SNP optimizer does not create any planned orders; if it is not set, the SNP
optimizer creates planned orders with no reference to a PPM/PDS.
See also:
Production Data Structure in SNP
Consideration of Incoming Quota Arrangements

Use
You can define that the system considers incoming, time-dependent quota
arrangements that you have defined in the master data for optimization-based
planning in Supply Network Planning (SNP).
The consideration of quota arrangements is valid for the following receipt types:
● In-house production
● External procurement
● Stock transfers from other locations
You can define penalty costs for cases where the SNP optimizer exceeds or falls
short of the quota arrangements. The SNP optimizer takes these costs into account
in addition to the other costs that are relevant to source determination. For more
information, see Source Determination.
Prerequisites
In the SNP optimizer profile on the General Constraints tab page, you have set the
Consider Quota Arrangements indicator. By default, the indicator is not set.
Features
Time-Dependent Quota Arrangements
● The SNP optimizer takes into account incoming quota arrangements that you have defined in the
quota arrangement master data. You create the quota arrangements in a time-dependent way, in
other words, for a particular validity period that you have also specified in the quota arrangement
master data.
● The validity period does not have to agree with the periods in the planning buckets profile. In the
SNP optimizer profile, you can define how the SNP optimizer proceeds if multiple quota
arrangements exist for a certain period. You can use the Multiple Quota Arrangements in Bucket
indicator on the General Constraints tab page to define that the optimizer considers the first or the
last quota arrangement in a period. The optimizer ignores the remaining quota arrangements within
the period.
Quota Arrangements for Products and Product Groups

● You can specify in the quota arrangement master data whether the quota arrangements are to be
valid for a product or a product group. In this case, the quota arrangement refers to the total
receipts of the corresponding product group.
● If you want to define the quota arrangements for product groups, you must specify product groups
and product group types, which you have already defined in Customizing for the master data under
Product → Product Groups, in the product master data on the Properties 2 tab page. All the
products in the product group must have the same base unit of measure.
Incomplete Quota Arrangements

You do not have to define quota arrangements for all sources of supply. In the SNP
optimizer profile on the General Constraints tab page, you can define how the SNP
optimizer proceeds if a quota arrangement has not been defined for a possible
source of supply. You have the following options:
● Treat as Zero: The optimizer does not plan any procurement from sources of supply for which no
quota arrangements have been defined.
● Ignore: The optimizer plans procurement from all sources of supply that come into question. Quota
arrangements are taken into account for the sources of supply for which they were defined.
Penalty Costs for Quota Arrangement Violations

Quota arrangement values are soft constraints for the SNP optimizer that the
system can violate in return for incurring penalty costs. You can define these
penalty costs for exceeding or falling short of the quota arrangement value in the
quota arrangement master data.
If you set the penalty costs suitably high, the system will try to adhere to the quota
arrangements (since the optimizer always tries to find the solution with the lowest
costs).
Creating and Changing Quota Arrangements

The SNP optimizer can also create quota arrangements for subsequent optimization-
based or heuristic-based planning runs. For example, after a longer term
optimization-based planning (monthly, for instance), you can perform shorter term
heuristic planning runs using the quota arrangements created in the optimization
planning run as the basis for the heuristic planning runs. To do this, set the Modify
quota arrangements indicator when you run the optimizer in the background (see also the F1
help).
If you set the Modify quota arrangements indicator, the optimizer might overwrite quota
arrangements that you created previously. Moreover, you still have to define penalty costs
for the quota arrangements created by the optimizer so that the system can take them into
account in the next optimization run.
Activities
You run the SNP optimizer interactively or in the background. For more information,
see Running the Optimizer from the Interactive Planning Desktop and Running the
Optimizer in the Background. During source determination, the system considers
the penalty costs that you have assigned to potential quota arrangement violations.
Lot Size Planning

Purpose
You use lot size planning to specify which demand quantities are to be made
available in which buckets (periods). You can choose to do one of the following:
● To procure or produce the exact demand quantities of a product. The order size corresponds to
the demand quantity.
The main advantage of this method is the low storage costs. Its disadvantages
include high costs for procurement and setup.
● To group several product demand quantities from consecutive buckets into larger procurement lots
or production lots. With this method, procurement or production is done in advance and you can
make use of the economy of scale cost savings.
The advantages of this method include low procurement and setup costs. Its
main disadvantage is the high storage costs.
The SNP optimizer uses all the costs to determine the optimal (most cost-effective)
procurement lot sizes, production lot sizes, and transportation lot sizes. For finite
capacity planning with the SNP optimizer, both costs and available capacities are
relevant for lot size planning.
Increased setup consumption and/or higher setup costs can be taken into account
during planning or rough-cut planning in Supply Network Planning (SNP) for
integration with the subsequent Production Planning and Detailed Scheduling (for
example, SAP APO Production Planning and Detailed Scheduling, PP/DS). This makes it
easier for Production Planning and Detailed Scheduling to create feasible plans.
Prerequisites
The prerequisites for lot size planning are the same as those for general
● Planning Area Administration

● Configuring Master Data for the Optimizer
● Model/Version Creation
● Supply Chain Model Setup
● Release of the Demand Plan to Supply Network Planning
Lot Size Planning for Production

When using the SNP optimizer for lot size planning in production, you can model
both setup consumption and setup costs in the system. You can also influence lot
size planning by defining minimum lot sizes, maximum lot sizes, and discrete
(integer value) lot sizes.
Setup Consumption
You can choose any of the following three options for modeling setup consumption
in the system:
...
1. If the past setup consumption amount per bucket is known to you, you can model setup
consumption by reducing the available capacity of the production resource accordingly. If the setup
consumption remains the same across all buckets, you can reduce the rate of the resource
utilization in resource master data. For example, for a setup consumption of 20%, enter a bucket
capacity utilization rate of 80%.
If setup consumption varies across the different buckets, you can reduce the
standard capacity for individual buckets accordingly.
In this instance, you can choose the linear optimization method for the
optimization run, meaning that discretization is not required.
2. If the setup consumption level is not known but setup consumption is relatively low in
comparison to bucket capacity, you can define setup consumption in the PPM as a fixed bucket
resource consumption.
In order for the optimizer to be able to take into account the fixed resource
consumption defined in the PPM, you must define a discretization horizon in the
Fixed Material and Resource Consumption field of the SNP optimizer profile. You also
have to choose the discrete optimization method in this profile.
3. If the setup consumption level is not known and setup consumption is relatively high in
comparison to bucket capacity, you can run cross-period lot size planning. For more information,
see Cross-Period Lot Size Planning.
Setup Costs
The optimizer primarily uses setup and storage costs as a basis for determining
optimal lot sizes and lot numbers. If setup costs are high and storage costs low, the
optimizer is most likely to plan large lots whereas if setup costs are low and storage
costs high, it will plan small lots.
You can define the setup costs as fixed costs within the PPM cost function (choose
the Maintenance pushbutton near the Cost Profile field and enter the setup costs in
the Fixed costs field). You must also choose the discrete optimization method in the
SNP optimizer profile and enter a discretization horizon in the PPM Execution field
within the Discrete Constraints tab.
If you want to perform sequence-dependent lot-size planning, the optimizer takes

into account setup transitions, setup costs, and setup times that you have defined
in a setup matrix. This allows you to optimize your setup costs. For more
information, see Sequence-Dependent Lot-Size Planning.
Integration
If you have integrated SNP and PP/DS planning (the SNP PPM and PP/DS PPM are
linked), the optimizer takes into account setup statuses from PP/DS. This means
that the optimizer does not take into account setup consumption and setup costs if
a PP/DS order for the associated PP/DS PPM already exists in the corresponding
bucket. If you want to have this integration, you must set the Cross-Period Lot Size
Planning indicator (for Cross-Period Lot Size Planning) or the Lot Size Planning: Not
Cross-Period indicator (if your lot size planning is not cross-period) on the Integration
tab page in the SNP optimizer profile.
Minimum and Maximum Lot Sizes

If, due to technical constraints for instance, a minimum or maximum lot size is
required for your production (for example, at least one entire tank of active
ingredient must be produced), you can define minimum and maximum lot sizes.
You can choose one of the following two options for defining these minimum and
maximum lot sizes:
...
1. You define the minimum and maximum lot size in the PPM.
2. You define the minimum lot size on the Lot Size tab page in location product master data in
conjunction with the Fixed Lot Size or Lot-for-Lot lot-sizing procedure. The SNP optimizer takes
these settings into account for integration purposes (with PP/DS, for example). The minimum lot
size defined in the product master applies to all the PPMs that use this product as the header
material. If the minimum lot size in the product master is larger than the minimum lot size in the
PPM, the optimizer takes into account the value from the product master. The maximum lot size
defined in the product master has no relevance for the SNP optimizer.
• ○ Fixed lot size: The SNP optimizer considers the value you specified for the
fixed lot size as the minimum lot size. Per PPM execution, the PPM output
quantity (the output component quantity) is the same as this fixed lot size.
• ○ Lot-for-lot: The optimizer takes into account the minimum lot size defined
in the location product master as the minimum lot size.
In order for the SNP optimizer to be able to take into account the minimum lot sizes
defined in the PPM or location product master, you must also choose the discrete
optimization method in the SNP optimizer profile and enter a discretization horizon
in the Minimum PPM Lot Size field within the Discrete Constraints tab. The optimizer also
takes into account the maximum PPM lot size defined in the PPM when the linear
optimization method has been chosen. For this, you must set the Maximum PPM Lot
Size indicator from the General Constraints tab of the SNP optimizer profile.
Discrete (Integer Value) Lot Sizes

If, due to technical constraints for instance, you can only produce integer multiples
of a lot (for example, you can only produce entire tanks of active ingredient and not
1.5 tanks), you can set the Discretization indicator in the PPM. In order for the
optimizer to be able to consider this indicator, you must also choose the discrete
in the Integral PPMs field within the Discrete Constraints tab. If you do this, the
optimizer always plans production in integer multiples of the output component
quantity.
Defining a fixed lot size or lot-for-lot in the Lot Size tab of the location product
master data for integration reasons (with PP/DS, for instance) has the following
implications:
● Fixed lot size: Per PPM execution, the SNP optimizer always sets the output quantity in the PPM
to the value you entered for the fixed lot size.
● Lot-for-lot: Every time the PPM is executed, the SNP optimizer sets the output quantity in the PPM
to the value you entered in the Rounding Value field (on the Lot Size tab page) of the location
product master.
The quantity of input components and amount of resource consumption are
adjusted accordingly. Since you can also use the lot sizes defined in the location
product master when creating PP/DS orders, you can plan with greater precision.
Lot Size Planning for Transportation

Fixed Means of Transport Costs
As with setup costs for production, the SNP optimizer primarily uses fixed means of
transport costs as a basis for determining optimal transportation lot sizes. If these
costs are high, the optimizer is most likely to plan larger transportation lots
(meaning less shipments; once every two weeks, for example).
You can define these fixed means of transport costs in the Means of Transport section
of the transportation lane. In the CostFunctn field, specify a transportation cost
function, for which you have defined fixed costs. You must also choose the discrete
in the Means of Transport field within the Discrete Constraints tab.
Minimum and Maximum Lot Sizes

You can define minimum and maximum lot sizes for transportation in the SNP lot
size profile (transportation lanes). You then specify this lot size profile for a
particular product in the Product-Specific Means of Transport section of the
transportation lane. You can thus define minimum and maximum transportation lot
sizes for specific products.
In order for the optimizer to be able to consider the defined minimum lot size, you
must choose the discrete optimization method in the SNP optimizer profile and
enter a discretization horizon in the Minimum Transport Lot Size field within the Discrete
Constraints tab. If you set the Maximum Transportation Lot Size indicator of the General
Constraints tab page in the SNP optimizer profile, the SNP optimizer also takes the
maximum transportation lot size into account when the linear optimization method
is chosen.
Discrete (Integer Value) Transportation Lots and Means of Transport

If you only want to transport integer multiples of a transport lot size (entire pallets
of a product only, for example), you can define that you want the optimizer to take
this into account during planning, by choosing the discrete optimization method in
the SNP optimizer profile and by entering a discretization horizon in the Integral
Transport Lots field of the Discrete Constraints tab. You usually define the
transportation lot size as a rounding value in the SNP lot size profile (transportation
lanes). Alternatively however, you can set in the Maintain Global SNP Settings activity
in Customizing for SNP that the optimizer is to use the rounding value defined in the
destination location’s location product master as the transportation lot size.
Similarly, you can define that you want the optimizer to plan means of transport
only in integer values, by only scheduling whole trucks for a shipment, for example.
To do this, enter a discretization horizon in the Integral Means of Transport field.
Lot Size Planning for Procurement

Fixed Procurement Costs
As with setup costs for production and fixed means of transport costs for
transportation, the SNP optimizer primarily uses fixed procurement costs as a basis
for determining optimal lot sizes for procurement. If these costs are high, the
optimizer is most likely to plan large procurement lots (meaning less procurement
operations; once every two weeks, for example).
You can define these fixed procurement costs on the Procurement tab page of the
location product master. In the Cost function field, specify a procurement cost
function, for which you have defined fixed costs. You must also choose the discrete
in the Procurement Quantity field on the Discrete Constraints tab page.
Minimum, Maximum, and Integral Lot Sizes

At present, the SNP optimizer cannot take into account minimum, maximum, and
integer value procurement lot sizes during lot size planning. However, there is a
workaround for modeling these lot size constraints:
...
1. First create your supplier as a location in your model

2. Create a transportation lane between the supplier and the demand location
3. You can now model the procurement lot size constraints as transportation lot size constraints
(see the section on Lot Size Planning for Transportation)
See also:
● Optimization-Based Planning
● Running the Optimizer in the Background
● Running the Optimizer from the Interactive Planning Desktop
● Definition of Time-Based Constraints in Interactive Planning
Stock Planning
Purpose
Companies have stock on hand to safeguard against uncertainties and fluctuations
in demand. However, holding an excessive amount of stock ties up too much capital
and generates high storage costs. If there is insufficient on-hand stock, there is a
danger that unexpected demand might arise that cannot be fulfilled.
Therefore, the SNP optimizer’s main purpose in stock planning is to keep the on-
hand stock between specific upper and lower bounds.
Prerequisites
The prerequisites for stock planning using the SNP optimizer are the same as those
for general optimization-based planning:
• Set Up of Planning Area

• Set up of Master Data for the Optimizer
• Creation of Model Name and Version
• Set Up of Supply Chain Model
• Release of Demand Plan to Supply Network Planning
Integration
When planning the on-hand stock, the SNP optimizer takes into account goods
receipts and issues that were caused by other system application areas (PP/DS,
deployment, or Transport Load Builder, for example) or fixed SNP orders.
If these orders involve goods issues that cannot be balanced by the optimizer within
the relevant bucket (period), the optimizer has an infeasible problem. To avoid this,
you can specify in the SNP optimizer profile (in the Integration tab) that goods issues
caused by stock transfers or planned orders are to be treated the same as the
customer demand, demand forecast, or corrected demand forecast, meaning that
these demands do not have to be fulfilled. In the product master on the SNP1 tab
page, you define penalty costs for non-fulfillment of these demands, which the SNP
optimizer takes into account. This makes the problem feasible for the optimizer.
However, the solution provided may contain shortfall quantities.
Storage costs
• First, you can set for the storage cost calculation whether you want the SNP optimizer to interpret
the on-hand stock per bucket as the average stock on hand per bucket or as the stock on hand at
the end of the bucket:
•  Average stock on hand: The optimizer calculates the storage costs by
multiplying together the on-hand stock, the storage costs defined in the
location product master (see below), and the number of days in the bucket.
This option is most appropriate when receipts and issues are evenly
distributed over a bucket.
•  Stock on hand at end of period: The optimizer calculates the storage costs
by multiplying the stock on hand with the storage costs defined in the
location product master. This option is most appropriate when receipts and
issues are unevenly distributed over a bucket.
• You define storage costs for a specific product at a specific location in the Prod. Storage Costs
field on the Procurement tab page of location product master data.
• You should always define storage costs since this is how you ensure that the SNP optimizer does
not plan any unnecessary production. Using storage costs helps you to ensure that production,
procurement, and transportation always match demand as near to the time as possible.
• Since storage costs are defined on a product-specific basis, you can use them to control where (in
which locations) a product is stored.
• Storage costs are independent of storage resource consumption, which means you can define
storage costs without creating a corresponding storage resource.
Adhering to a Lower Bound for Stock

Safety Stock Planning
• The SNP optimizer decides whether safety stock is to be created for a product in specific locations,
and if so, how it is to be created.
• You have to provide the optimizer with the information about the level of safety stock that is
required. You can either enter this level directly in the location product master based on past
experience or use extended safety stock planning to allow the system to determine it. The
optimizer automatically includes the results of extended safety stock planning in a key figure. For
more information, see Safety Stock Planning.
• The optimizer considers safety stock as a soft constraint that can be violated with incurring penalty
costs. In order for the optimizer to take safety stock into account, you have to either define penalty
costs for violating safety stock in the Safety Stock Penalty field on the Procurement tab page of the
location product master, or define them as a time-based key figure in interactive planning (planning
book 9ATSOPT for instance); see also Definition of Time-Based Constraints in Interactive
Planning. These costs must be higher than the storage costs. If not, the optimizer would never plan
safety stock.
In the SNP optimizer profile (on the General Constraints tab page), you can define
whether you want the optimizer to take into account safety stock at all, and if so,
whether you want it to use the absolute deviation value or the relative deviation
value when calculating the penalty costs for falling below the safety stock level.
For absolute deviation, the optimizer multiplies the absolute value fallen below
with the penalty costs defined in the product master (per day). For relative
deviation, the optimizer multiplies the percentage fallen below with the penalty
costs defined in the product master (per day).
• The safety stock level is not permitted to exceed the product-specific upper bound for storage
defined in the location product master (the Maximum Stock Level field of the Lot Size tab page).
Days’ Supply Planning

You can also use safety stock for static days’ supply planning with the SNP
optimizer. When using static days’ supply planning, it should be ensured that there
is at all times at least as much on-hand stock of a product as is required within the
days’ supply horizon.
To do this, define a safety stock method for the appropriate product on the Lot Size
tab page in the location product master (SZ, MZ, SM, or MM) and enter either a
safety days’ supply that is not period-dependent in the location product master or a
safety days’ supply that is period-dependent in the interactive planning table. Note
that for safety stock methods SM and MM, the SNP optimizer only considers
independent requirements as well as dependent and distributed demands caused
by fixed orders, since these demands and the demand locations are already known
before the optimization run.
The optimizer uses the days’ supply planning results as a basis for creating the
safety stock.
Adhering to an Upper Bound for Stock

Static Upper Bound for Stock
You can define a product-specific stock upper bound for a location product in the
location product master data. To do this, enter a value in the Maximum Stock Level
field of the Lot Size tab page. The SNP optimizer takes this upper bound into account
when planning if you set the Maximum Product-Specific Quantity Stored indicator of the
General Constraints tab page in the SNP optimizer profile. The optimizer considers the
upper bound for stock as a soft constraint, meaning that it can be violated subject
to the calculation of penalty costs. These penalty costs are assigned by the
optimizer, which means that you cannot set them in master data.
You can also define a time-based upper bound for stock in interactive Supply
Network Planning. For more information about this, see Definition of Time-Based
Constraints in Interactive Planning.
You can specify a multi-product stock upper bound by defining the available
capacity of a storage resource in the resource master data. The SNP optimizer takes
this upper bound into account when planning if you set the Storage Capacity indicator
on the General Constraints tab page in the SNP optimizer profile (see also, Finite
Capacity Planning).
Dynamic Upper Bound for Stock

You can use the shelf life functionality to define a dynamic stock upper bound for
optimization-based planning. In product master data, if you set the Plng with Shelf
Life indicator of the Attributes tab page and enter a horizon in the associated Shelf Life
field, the optimizer ensures when planning that at no time is there more stock on
hand than required in the specified horizon.
For example, if you enter a shelf life horizon of a week, you are specifying that you
do not want any goods receipts to be planned for the demand that exists in the
week before this horizon, which means that no stock should be kept on hand for
longer than a week prior to the demand.
In order for the SNP optimizer to be able to take into account the product’s shelf life
that you defined in the product master, you must set shelf life as a soft constraint in
the SNP optimizer profile. To do this, go to the General Constraints tab and select the
Continue Using Expired Product radio button. The optimizer then plans to continue
using products that have passed their expiration date, but calculates penalty costs
for doing so. We also recommend that you set the Product-Indep. Key figure Use
Penalty Costs. If you do this, the optimizer does not use the procurement costs of
the location product to calculate penalty costs (the default setting) but instead uses
penalty costs that are not product-dependent, which you set yourself in the
accompanying field.
Product Shelf Life

The SNP optimizer can also take into account the shelf life of a product but in a
restricted way. At no point in time does it try to plan more on-hand stock of this
product than is required in the corresponding bucket. However, if a larger product
quantity has to be stored than the quantity to be used in the bucket, the optimizer
considers the surplus as quantities that are to be disposed of as waste and
calculates corresponding penalty costs.
For this, first set the Plng with Shelf Life indicator of the Attributes tab page in the
product master data (as previously mentioned) and enter a horizon in the
associated Shelf Life field. Then, in the SNP optimizer profile, define shelf life as a
hard constraint by selecting the Dispose of Expired Product radio button on the General
Constraints tab page.We do not recommend that you set the Product-Indep. Key figure Use
Penalty Costs. In this case, the optimizer calculates the costs for procuring the
location product (defined in the product master) as penalty costs.
Constraints
• When creating orders at the end of the optimization run, the system does not distinguish between
the quantities the optimizer considers as waste and the other planned quantities. This means that
the sum from both quantities is displayed as the planning results (in interactive planning, for
example).
• The product shelf life defined in the product master data is not passed onto all the manufacturing
levels, which means for instance that the shelf life of an input component has no effect on the shelf
life of an output component. For example, if you define the shelf life of an active ingredient, the
system does not transfer this shelf life to the subsequent pills containing this ingredient or their
packaging.
• As with production, the product shelf life defined in the product master is not passed onto multiple
locations during transportation. This means that if a product is transported from one location to
another, the shelf life horizon starts anew.
The consequence of this is that when there are cycles in the distribution network
(transporting a product from one location through another and then back to the
start location), products lose their shelf life upon return arrival. In this instance,
the optimizer would be able to continue using a product that, in fact, needed
disposing as waste.
See also:
• Optimization-Based Planning
• Execute Optimizer in the Background
• Execute Optimizer in Interactive Planning
Use
The following table describes the profiles used by the SNP optimizer. To access each profile individually,
choose Supply Network Planning → Environment → Current Settings → Profiles from the SAP Easy
Access screen. You can also define the profiles in the Customizing for Supply Network Planning (SNP).
For more information, see the Implementation Guide (IMG) or the field-level help (F1 help).
Profile Used in Optimization Planning Run
SNP optimizer profile In this profile, you choose which optimization method you want to use
during the optimization run (linear optimization or discrete optimization)
and which constraints you want the system to take into account.
SNP cost profile In this profile, you assign a weighting to different cost elements in the
objective function (thus determining how the costs relate to one
another).
We recommend that you only change the standard settings for test
purposes when modeling. To avoid undesired side-effects, you should
not change the default setting of 1.0 in the production system if
possible. This setting corresponds to the costs entered in cost
maintenance.
SNP lot size profile In this profile, you define minimum and maximum lot sizes for the
(transportation lanes) shipment. You then specify this profile for one specific product in the
Product-Specific Means of Transport section of the transportation lane.
You can thus define minimum and maximum transportation lot sizes
for specific products.
If you wish to make shipments in integer multiples of a transportation
lot size only, you can also define the transportation lot size as a
rounding value in this profile.
To enable the optimizer to take into account the minimum lot sizes and
rounding values defined, you have to choose the discrete optimization
method in the SNP optimizer profile.
SNP optimization If you want to perform a new planning run after an SNP optimizer
bound profile planning run, you use this profile to improve planning stability by
restricting possible decision variable deviations from the previous
optimization plan. For example, you can permit smaller deviations at
the start of the planning horizon and then increase these towards the
end of the horizon to avoid too many last-minute planning changes.
Your new plan does not have to be based on the directly preceding
optimization run, you can also choose earlier runs.
SNP penalty cost You use this profile to define that certain customer demands are to be
group profile prioritized during optimization. For more information, see Prioritization
of Customer Demands and Demands with High Volume.
SNP priority profile You can use the SNP priority profile to define priorities for product
decomposition and resource decomposition , that is, you can change
the sequence in which the optimizer groups and plans products and
resources in partial problems. For more information, see
Decomposition.
SNP planning profile In this profile, you can make basic settings for the various SNP
planning procedures, such as heuristic, optimizer, deployment
heuristic, deployment optimizer, and Transport Load Builder (TLB).
The SNP planning profile that you activate in the SNP Customizing
under Maintain Global SNP Settings applies globally for all SNP
planning procedures. For some planning procedures, you can
overwrite the settings of the active profile by entering another SNP
planning profile during execution of planning in the background.
Parallel processing You use this profile to define how background jobs are divided in
profile parallel processes. You can specify the number of concurrent parallel
processes, the number of objects per processing block, and the server
Profile Used in Optimization Planning Run
group. In each case, you define the profile for one specific application
function, such as the SNP optimizer.
You can also maintain the SNP optimizer profile, the SNP cost profile, and the SNP
optimization bound profile in the interactive planning desktop of Supply Network Planning.
Decomposition
Use
Using the decomposition methods can reduce optimization runtime and memory
requirements in Supply Network Planning (SNP). Decomposition may also represent
the only way for the SNP optimizer to find a feasible solution in the event of large
discrete problems.
Decomposition is a flexible tool for balancing the tradeoff between optimization

quality and required runtime. When runtime is unrestricted, the SNP optimizer
usually provides a better (optimal) solution without decomposition; however, when
a fixed runtime has been specified, using decomposition could assist the optimizer
to find a better or, in fact, feasible solution.
Features
Decomposition Methods
The following decomposition methods are available: Time decomposition,
product decomposition, and resource decomposition. You can use time
decomposition as well as product decomposition in conjunction with the linear and
discrete optimization methods. It is only advisable to use resource decomposition in
conjunction with discrete optimization.
• Time decomposition speeds up the solution process by dividing the source problem into a series of
partial problems. The system then solves these partial problems sequentially.
• Product decomposition speeds up the solution process by forming product groups. The system
solves the complete model for one product group at a time according to the window size selected.
The rule of thumb is as follows: The smaller the window size, the less time it will take the system to
find a solution, but the larger the window size, the better the quality of the solution found.
• Resource decomposition speeds up the solution process by analyzing the material flow and basic
optimizer decisions about production, procurement, and transportation to determine a resource
sequence. The optimizer can then create sub-problems for the individual resources, which are
solved in sequence. The optimizer makes decisions in every sub-problem that cause the resource
to be loaded.
It is particularly advisable to use resource decomposition if the production
processes always load the resources in a similar sequence. Resource
decomposition does not reduce memory requirements. If you would like to
reduce memory requirements, you could use time decomposition alongside this
decomposition method. You cannot use resource decomposition in conjunction
with strict prioritization If you want to use product and resource decomposition
together, the system carries out the resource decomposition first. The product
decomposition then tries to improve upon the results of the resource
decomposition.
SNP Priority Profile

You can use the SNP priority profile to define priorities for product and resource
decomposition, that is, you can change the sequence in which the optimizer groups
and plans products and resources in partial problems.
For product decomposition, the sequence of planning is normally based on the costs
for non-delivery and the total demand quantity of the product. You can use the
priority profile to assign priorities for important products and, thus, control the
sequence for planning. The following rules apply:
• The system groups the products into partial problems according to their priorities and their
dependencies defined in the bill of materials. If a partial problem contains products with different
priorities, due to product dependencies, the partial problem takes on the priority of the product with
the highest priority (that is, the priority with the lowest number).
• The system plans partial problems with different priorities separately, so no overlapping occurs.
• If many products have the same or no priority, division into partial problems and the sequence of
planning are also based on the costs of non-delivery and the product quantity.
For product decomposition, you can also control division into partial problems using
window size, which you can specify for the decomposition methods in the SNP
optimizer profile. If you select a small window size, the optimizer plans products
with the same priority separately, since the partial problems are very small (0% =
separate planning). If you select a larger window size, the optimizer plans products
with the same priority together in one partial problem (99% = planning together in
one partial problem).
Note that, due to prioritization, the optimizer no longer exclusively considers the
defined costs when covering demand. Instead, the system plans the products with
the highest priority first. The system only considers costs when solving the
individual partial problems.
For resource decomposition, the planning sequence is generally predetermined by

the production process models (PPMs) or production data structures (PDSs). If the
sequence is not clear, or if you want another sequence, you can change it by
assigning priorities to resources. In this way, you can reverse the standard order
that the system uses to plan the assembly and then the end products, or you can
plan important resources that must be utilized for cost reasons first.
Activities
...
1. You specify a decomposition method in the SNP optimizer profile. To do this, select SNP
Optimizer Profile in the SNP Customizing or in the current settings, and then select the Solution
Methods tab page.
2. If necessary, specify a priority profile in the current settings of SNP, under Define SNP Priority
Profiles, and assign it to the decomposition methods on the Solution Methods tab page.
Configuring Master Data for the Optimizer

Purpose
This section lists all the master data that must be created to successfully run the optimizer in Supply
Network Planning. It also lists all the required entry fields and other data that the optimizer takes into
account. Use this information as a checklist before you run the optimizer to make sure you have
maintained all the master data for your supply chain model.
For detailed information, see the field-level help (F1 help). For more information, see the SAP
APO master data documentation.
If you want to work with local time zones, you have to set the Local Time Zone indicator
in Model and Version Management. If you do not set this indicator, we recommend that you
use the UTC time zone. When using local time zones, we also recommend that you use the
same time zone for both the location and the planning calendar or for the location and the
resource.
Process
...
1. You create locations (that are not product-dependent).

• ○ Location type
• ○ Storage resource
• ○ Handling resource
• ○ Calendar
• ○ Time zone
1. ...
2. You create products.

Tab Page/Screen Field
Header data ● Base Unit of Measure
Attributes ● Gross Weight and Unit
● Volume and Unit
● Shelf Life
Units of Measure Define a conversion from the volume unit into the
base unit of measure (based on the unit of
measure of the planning area)
SNP 1 For customer demand, demand forecast, and the
corrected demand forecast. Location-dependent
penalty costs are also available.
● No delivery penalty
● Delay penalty
● Maximum lateness
SNP 2 ● SNP production horizon
● SNP stock transfer horizon
● SNP forecast horizon
The first two horizons are also relevant if you are
using Production Planning and Detailed
Scheduling (PP/DS).
You can specify in the SNP optimizer profile on
the Integration tab page whether the horizons are
to be taken into account or not.
Procurement ● Procurement type
● Planned delivery time (with external
procurement)
● Cost function (with external procurement)
● Procurement costs
● Production storage costs
● Penalty costs for shortfall of safety stock
GR/GI ● Handling capacity consumption - if not
specified, the optimizer uses
the Volumespecified on the Attributes tab
page as the default value.
● Storage consumption - if not specified, the
optimizer uses the Volume specified on
theAttributes tab page as the default value.
3. You create resources.

You have the option of creating the following resource types for Supply Network Planning:
• ○ Single-mixed resource
• ○ Multimixed resource
• ○ Bucket resources
• ○ Transportation resource
Use single-mixed resources or multimixed resources if the resources are to be used for both
Supply Network Planning and Production Planning and Detailed Scheduling (PP/DS). A
bucket resource can only be used for SNP. We recommend that you create mixed resources
if possible. Note however that bucket-oriented block planning is possible in PP/DS in
conjunction with SNP only if you are using different resources for block planning in PP/DS
and Supply Network Planning. You ensure this by setting the Not SNP-Relevnt indicator for
the resource used in PP/DS.
To create transportation resources, use the same procedure as for creating bucket
resources.
For more information about creating resources, see the resource section in the SAP APO master data
documentation. Below is a list of the data that must be defined for optimization-based planning in SNP.
Single-Mixed Resources/Multimixed Resources

Standard Capacity You must define the available bucket capacity:
● Buckets – If you choose Buckets from
Conti., the PP/DS available capacity is
used to generate the available bucket. You
can also define a loss factor (for
maintenance or setup times, for example,)
here. If you choose Maintain Buckets, you
must enter the following additional data:
● Period type
● Number of periods
● Bucket capacity
● Utilization rate for bucket-oriented capacity
(%)
You can use the Available Bucket Capacity button
to display the defined available bucket capacity
for the individual buckets.
You can also still define an available capacity
profile and capacity variants, and change the
periodicity and capacity of individual buckets. For
more information about this, see the SAP APO
master data documentation.
You can define costs for the SNP optimizer in the
capacity profile or in the quantity/rate definition for
the individual capacity variants (for details, see
theCapacity variants button section below).
Planning Parameters Cross-period lot sizes (only valid for single-mixed
resources!) - set this indicator if you want to run
SNP optimizer cross-period lot size planning on
this resource.
Bucket Resources

General Data ● Resource
● Resource category
● Location – when you define a location, the
system refers to the time zone from the
location master data, otherwise you have
to enter the time zone.
● Time zone
● Planner
● Factory calendar
● Active variant – information about the
active variant of a resource is required
forliveCache purposes only. If you have
defined multiple capacity variants, you
should specify the maximum capacity
variant as the active variant or, if this has
not been defined, the normal capacity
variant. During the capacity check in
interactive planning, the system considers
the active variant. For more information,
see the explanation of theCapacity
Variants button.
Planning Parameters ● Day -/Day + - The resource capacity’s
validity period
● Capacity overload (%)
● Minimum load (%)
● Cross-period lot size planning - Activate
this indicator if you want to run an SNP
optimizer cross-period lot size planning on
this resource.
Standard Capacity ● Period type
● Bucket capacity
● Utilization rate for bucket-oriented capacity
(%)
Capacity Variants Button ● Capacity variant
● Valid from/to
● Capacity utilization
● Qty/rate definition
You can define multiple capacity variants and use
a status indicator to label the available capacity of
this variant as normal capacity, maximum
capacity, or minimum capacity. You can define
costs for using the normal or maximum capacity
and for falling below the minimum capacity in the
quantity/rate definition or the capacity profile of
the resource. The SNP optimizer then takes these
costs into account during planning. However, the
SNP optimizer only takes into account the
minimum available capacity and the costs you
defined for a capacity variant with the
statusNormal Capacity for production resources.
You define the status indicator globally for all
resources that have been assigned with the
capacity variant. From the resource initial screen,
choose Current Settings → Capacity Variants. The
default value is a maximum capacity (blank
field). If you have defined multiple capacity
variants with the same status, the system uses
the smallest numbered variant.
We recommend that on the General Data tab
page you always define the maximum capacity
variant as the active variant or, if this has not
been defined, the normal capacity variant.
The system includes the default available capacity
for periods for which you have not created a
capacity variant. If the normal capacity is below
the minimum capacity, the system uses the
normal capacity as the minimum capacity. If the
normal capacity exceeds the maximum capacity,
the system uses the normal capacity as the
maximum capacity.
The SNP optimizer does not consider
theWorkdays field for planning. The optimizer
considers the entries within this field when
calculating the available capacity of the capacity
variant but always uses the factory calendar for
planning.
Definitions Button - the Quantities/Rates Tab You use the Qty/Rate Definition to define the
Page available capacity for the capacity variant.
● Qty/rate definition (name)
● Valid to
● Planner
● Period type
● Bucket capacity
● Unit
● Costs – You define costs for falling below
a minimum capacity or for using a normal
or maximum capacity (you define costs for
a capacity variant that you assign with
statusMinimum Capacity, Normal Capacity,
or blank ( = maximum capacity). For more
information, see the Capacity Variants
Button section above. The optimizer only
takes into account costs you define for a
capacity variant with status Normal
Capacity if the resource is a production
resource.)
4. You assign resources to locations in the location master data.
5. You create PPMs.
Initial screen ● Plan number
● Use of a plan: S (for SNP)
Operations ● Description of PPM
● Single level costs
● Cost function (cost profile)
● Operation
● Description (of operation)
Activities In Supply Network Planning, each activity must be
at least one day long or a multiple of one
day.Each operation can also contain only one
activity.
● Activity number
● Description (of activity)
● Activity category
● Scrap %
Components ● Product
● Input/output indicator
● From date
● To date
● Unit of measurement
● Material consumption (variable)
● Time-dependent data
Modes ● Mode - you can specify only one mode per
activity
● Unit of measure (must be Day)
● Duration (fixed)
● Primary resource (required only if
resources are connected to this PPM)
● Location (required only if resources are
connected to this PPM)
● Resource consumption (rate) and unit
(required only if resources are connected
to this PPM)
Resources ● Resource (can enter several, but required
only if resources are connected to this
PPM)
● Unit of measure (required only if resources
are connected to this PPM)
● Calendar resource (for the entire PPM)
● Variable and fixed bucket consumption
(required only if resources are connected
to this PPM)
● Time-dependent data
Activity relationships - Predecessor/successor ● Operation name
Tab Pages ● Activity number
Product plan assignment button ● PPM and description
● Validity (date/time)
● Location
● Discretization
● Bucket offset
● Minimum and maximum lot size
Results
After you have configured the master data, you must set up the supply chain model in the Supply Chain
Engineer, including the creation and maintenance of transportation lanes, before you can perform any
planning runs.
See also:
The SAP APO master data documentation
Supply Chain Model Setup
Running the Optimizer from the Interactive Planning

Desktop
Use
The optimizer proposes a plan for multiple products simultaneously based on the
minimum procurement costs, storage costs, transportation costs, and production
costs without overloading resources.
Prerequisites
● You have set up the planning area and planning book
● Master Data Setup for the Optimizer
● You have maintained optimization profiles
● Model/Version Creation
● Supply Chain Model Setup
● Release of the Demand Plan to SNP
Procedure
...
1. Select Advanced Planning and Optimization → Supply Network Planning → Planning →

Interactive Supply Network Planning from the SAP Easy Access screen. The Planning Book: SNP
Interactive Planning / SNP Plan (Live) screen appears.
2. Choose to display the shuffler.You then choose the location products you want to be used
in the optimization run from here.
3. From the dropdown box in the first sort statement (Show...), choose: APO location product.
You can also choose specific location products to be used by choosing the icon to the right of this
dropdown box. In addition, you can perform a consistency check for this data by choosing Check
Entry.
4. If required, limit the range of location products to be planned by making selections from the
dropdown boxes under the second sort statement (that fulfill the following conditions...).For
example, you can choose different planning versions.
5. Choose . The location products are now displayed in the selector.
6. Double-click on a location product to display the current situation in the workspace to the right
of the selector, or place your cursor on a location product and choose the Load data icon.
7. Select the location products to be planned. You can choose either all the location products
displayed (choose Select all), or particular location products by placing your cursor on a location
product, clicking and holding down the left mouse button while dragging the cursor until all desired
location products have been highlighted (alternatively, use the Shift and Arrow keys on your
keyboard).
8. Choose Optimizer, to call the optimizer. The SNP Optimizer window appears.
The Optimizer icon is displayed on the interactive desktop automatically if you
are using the standard SNP planning book SNP94. However, If you create your
own planning books and wish to use the optimizer in interactive planning, you
must specify that you want this icon to be displayed. You do this in the Design
mode of the interactive planning desktop.
9. On the Optimization tab page in the SNP Optimizer window, you choose one of your
predefined SNP optimizer profiles, cost profiles, optimization bound profiles, and penalty cost group
profiles. By choosing the icons , , and , you branch to the maintenance screens for the
profiles to make changes to existing profiles, for example.
10. Choose to start the optimization run.
The current solution resulting costs determined by the optimizer are displayed in
the Current Solution area of the Optimization tab page. The individual steps of the
optimization process are displayed in the Status area during the optimization run
and information about intermediary solutions is displayed in the Solution Run
area. In addition to this, messages about the current optimization run are
displayed in the Messages area.
You can also display the products that were selected for this optimization run by
choosing . Choose to branch to the Supply Network Planning: Optimizer log file
screen. From there, you can decide which type/form of log to display (the
message log, input log, or results in a text file for example.)
11. Choose the Solutions tab page to view information about the previous optimization runs. If you
select a solution in the right-hand screen area, the data corresponding to that solution appears in
the left-hand area.
12. Choose the Messages tab page to view messages about the previous optimization runs. If you
select an optimization run in the left-hand screen area, the messages corresponding to that
optimization run appear in the right-hand area.
See also:
Definition of Time-Based Constraints in Interactive

Planning
Use
A number of constraints are taken into account during the SNP optimization run,
including capacity constraints that have been defined for resources. You usually use
the SNP optimizer profile to specify which constraints you want the optimizer to
consider during the optimization run. However, in certain circumstances, it might be
necessary to define constraints that are time-based; for example, if a supplier
provides varying quantities of a product from bucket to bucket. You can define
these time-based constraints in interactive planning. You can set the following
bounds:
● An upper bound for external procurement (at product-location level)

● An upper bound for stock on hand (at product-location level)
● An upper bound for production (at product-PPM/PDS level)
● An upper bound for transportation (at product-transportation lane level)
● An upper bound and a lower bound for total receipts (at product-location level)
Prerequisites
The following prerequisites must be met for considering time-based constraints:
● You have not set the Ignore Time-Based Constraints indicator in the SNP optimizer profile.
● You use a SAP GUI as of version 7.10. In this case, you can see in interactive SNP planning
whether or not you have entered 0 in a key figure. This is particularly useful for the receipt upper
bound.
Features
Upper Bounds for External Procurement, Stock on Hand, Production, and
Transportation
● In the data view OPT_TSBD in the standard SNP planning book 9ATSOPT, there is a table in the
lower part of the screen containing the four key figures Procurement Upper Bound, Stock Upper
Bound, Production Upper Bound, and Transportation Upper Bound that you can use in addition to
the standard functions of interactive SNP planning. You can define upper bounds for the individual
key figures in specific periods. These upper bounds are then taken into account by the system
when you perform an SNP optimization run.
● The three upper bounds for external procurement, production, and transportation are considered
by the optimizer as pseudo-hard constraints. Pseudo-hard constraints can be violated but only by
calculating infinitely high penalty costs, which means that the optimizer only violates this type of
constraint if it cannot find any other feasible solution.
For external procurement, transportation, and production, you cannot define any
time-based lower bounds because this could prevent the optimizer from finding
a feasible solution.
● In the SNP optimizer profile, you can specify whether you want the optimizer to consider the upper
bounds for stock as a soft constraint or a pseudo-hard constraint (on the Extended Settings tab
page, activate or deactivate the Consider Upper Bounds for Stock as a Soft Constraint indicator).
The optimizer can violate soft constraints by calculating penalty costs. You can define these
penalty costs in a time-based key figure in planning book 9ATSOPT.
The safety stock is the lower bound that can be defined on a time basis for stock
on hand. It is always a soft constraint for the optimizer. There is another time-
based key figure in planning book 9ATSOPT that you use to define penalty costs
for falling below the safety stock level.
● You can use the Display Dependent Objects function to define the upper limit for production for
specific production process models (PPMs) or production data structures (PDS) and the upper limit
for transportation for specific transportation lanes. You define the upper bounds for external
procurement and stock on hand at location product level.
Only the relevant upper bounds are displayed on screen, based on your
selection. Thus, if you choose a location product, only the upper bounds for
external procurement and stock on hand are displayed.
Note that when entering the upper bound for production, you do not enter the
production quantity, instead enter the number of times the PPM or the PDS
concerned is to be executed. To do this, you set how often you want PPM
execution to be started within a period. The duration of the PPM or the PDS then
determines the period in which product quantities are available. For example, if
you want to define a quantity of 30 pieces as the upper bound on the third
workday and the associated PPM or PDS produces 10 pieces each time it is
executed (taking 3 days), on the first workday you have to specify that you want
the PPM or the PDS to be executed for a maximum of three times - and therefore
enter 3 as the value for the first workday.
● In an additional key figure for the individual upper bounds, you can show that an upper bound
value of 0 is to be interpreted as an actual upper bound by specifying not equal to 0. Otherwise, a
value of 0 signifies that there is no upper bound.
Upper Bound and Lower Bound for Total Receipts

In the data view OPT_TSRCBD, a table with key figures is available that you can use
to define receipt upper bounds and receipt lower bounds. Both of these bounds are
soft constraints for the optimizer. In two additional key figures, you can define the
penalty costs for falling short of the receipt lower bound and for exceeding the
receipt upper bound.
Deactivation of Consideration of Time-Based Constraints

You can specify in the SNP optimizer profile that you would like the system to ignore
the time-based constraints in the optimization run (by going to the Extended Settings
tab page and setting the Ignore Time-Based Constraints indicator). This can be a good
idea if you want to use an SNP optimization bound profile for the optimization run,
for example. If you use time-based constraints in conjunction with the bounds from
the optimization bound profile, the constraints might cancel each other out. If this
occurs, the optimizer will not be able to find a feasible solution.
However, if you do use the SNP optimization bound profile in conjunction with the
time-based constraints, the optimizer takes into account the smaller of the upper
bound values that have been defined. Note that you can also define lower bounds in
the optimization bound profile. If the lower bound defined here is higher than the
upper bound defined in interactive planning, the optimizer will not be able to find a
feasible solution.
Mass Maintenance of Key Figures

You can also define values for key figures using mass processing. To do this, choose
the function Mass Maintenance of Time Series Key Figures (on the SAP Easy
Access screen, choose Advanced Planning and Optimization → Supply Network Planning →
Environment → Mass Maintenance of Time Series Key Figures).
Activities
...
1. On the SAP Easy Access screen, choose Supply Network Planning →Planning → Interactive
Supply Network Planning (all Books). Choose the planning book 9ATSOPT in the planning area
and the relevant data view.
2. Define the time-based upper and lower bounds as well as the relevant penalty costs in the
planning tables.
3. Run the SNP optimizer in interactive Supply Network Planning or in the background. For more
information, see running the optimizer from the interactive planning desktop and running the
optimizer in the background.

Use
The optimizer proposes a plan for multiple products simultaneously based on the
minimum procurement costs, storage costs, transportation costs, and production
costs without overloading resources.
Prerequisites
● You have set up the planning area and planning book
● You have set up the master data for the optimizer
● You have maintained optimization profiles
● You have created a model name and version
● You have set up the supply chain model
● You have released the demand plan to Supply Network Planning
● You have locked any inbound or outbound queues in the ERP system during the time of the
optimization run:
• ○ If you cannot rule out that data will be transferred from an ERP system to
the SAP SCM system (or from SAP SCM to ERP) using the Core Interface (CIF)
during the optimization run, you can lock inbound or outbound queues in the
ERP system from the SAP SCM system. This should prevent plan
inconsistencies due to transaction data that is transferred from the ERP
system to SAP SCM during the optimization run, which the optimizer then
ignores. During the CIF transfer, you can also prevent planning objects from
being locked for CIF or the optimizer.
• ○ To lock outbound queues, you can use the /SAPAPO/CIFSTOPQUEUES

and /SAPAPO/CIFSTARTQUEUES reports in SAP SCM. Reports RSTRFCI1 and
RSTRFCI3 are available for locking inbound queues (see also, OSS note
487261).
Procedure
...
1. From the SAP Easy Access screen, choose Advanced Planning and Optimization ® Supply
Network Planning → Planning → Supply Network Planning in the Background → Supply Network
Optimization.
2. Enter the planning book and data view.
3. Enter an SNP planning profile that you may have defined in Customizing for SNP. This
contains basis settings for the SNP planning procedures. If you do not specify a profile, the system
uses the default profile activated in Customizing.
4. Enter a parallel processing profile that you may have defined in Customizing for SNP. This
determines how the background jobs are divided into parallel processes.
5. Enter a selection profile in which you stored your selections in interactive Supply Network
Planning or manually select data for planning. To enter data manually, follow this procedure:
2. ...
1. a. Enter the planning version.
2. b. Enter the products and locations you wish to plan. If you intend
to plan all the products and locations of the planning version, you can leave
these fields blank.
6. If you also want to plan all the products of a supersession chain as part of product
interchangeability in SNP, make the relevant setting. For more information, see Product
Interchangeability in Supply Network Planning.
7. In the Source Determination field, select the level of a source of supply hierarchy at which you
want the system to consider sources of supply for in-house production. The default value is All
Levels.
You can use this field in the planning with aggregated resources process, for
example.
8. Specify the start and end date that you want the system to consider for planning. This entry is
optional. If you do not enter a start and end date, the system uses the planning buckets profile that
was specified in the data view.
9. Enter the name of the optimizer profile that you want to use for this optimization run.
10. Enter the name of the cost profile that you want to use for this optimization run.
11. Enter the identifier for the optimization bound profile you want to use for this optimization run.
This entry is optional.
12. If you want to prioritize customer demands during optimization, specify a penalty cost group
profile. For more information, see Prioritization of Customer Demands and Demands with High
Volume.
13. If required, set the Modify Quota Arrangements indicator.
The results of the optimization run can be used to calculate quota arrangements
for use in the heuristic (inbound quota arrangements) and the deployment
heuristic (outbound quota arrangements). If you set the Modify Quota
Arrangements indicator, the system automatically creates optimal quota
arrangements, which means that you do not need to maintain them manually in
the Supply Chain Engineer.
You use the Inbound, Outbound, and Both indicators to set whether the optimizer
is to modify and create inbound quota arrangements, outbound quota
arrangements, or both. In the Start Date for Modification and End Date for Modification
fields, you can specify the horizon within which the system is to modify and
create quota arrangements. If you leave these fields blank, the system modifies
quota arrangements over the entire planning horizon. You can also specify the
smallest period size for which the system is to modify and create quota
arrangements. These options can help you to improve performance.
You should use this feature with caution since there is no back-up of the original quota
arrangements.
If you define a subset of the model for the optimization run (for example, some of the
locations), then the quota arrangements will only be changed for the locations that are part
of the subset. The quota arrangements for the other locations remain unchanged.
We recommend that you either optimize for the whole model or check the quota
arrangements for the remaining locations and manually change them if necessary. Only use
this function if the planning situation for the optimization run can be viewed as a
representative planning situation and the overall planning environment is fairly stable.
Otherwise the results of optimization will not lead to adequate quota arrangements.
14. Choose Execute.
Results
At the end of the optimization run, you access the results by choosing Supply
Network Planning →Reporting → Optimizer Log Data.Alternatively, you can display the
results in interactive SNP planning (Supply Network Planning → Planning →Interactive
Supply Network Planning).
See Also

Use
Costs play an essential role for optimization-based planning in Supply Network
Planning (SNP). The optimizer selects the plan with the lowest total costs from all the
permitted production and distribution plans. This means that the optimizer also
makes business decisions based on the costs involved for covering a demand at a
certain point in time, for example.
You can provide the optimizer with the costs for planning by specifying your actual
costs such as production and transportation costs in the system. You can also define
control costs that are in accordance with your business goals. For the planner,
however, the conversion of business goals into control costs is not easy.
With the automatic cost generation function, you can easily generate all the control
costs relevant to the optimizer (that is, the cost model). Thesystem generates these
costs automatically based on the business goals you have defined. The system
requires the main goal to be the maximization of the service level. You can also
define the following goals:
• Consideration of demand and product priorities

• Consideration of procurement priorities
In addition, you can use this function to quickly and easily create an optimization-
based production plan. To create a finite (capacity-based) production plan, you only
have to make a few additional settings (such as the consideration of capacities).
Features
Generating the Cost Model
The system generates the following control costs:
• Storage costs
• Production costs, that is, costs of the production model (PPM) or of the production data structure
(PDS).
• Product-specific transportation costs
• Penalty costs for shortfall of safety stock
• Penalty costs for non-delivery
• Penalty costs for late delivery
In order for the system to be able to calculate the costs for a late delivery, you must
define a maximum delay in the product master data on the SNP 1 tab page.
The system ignores all the costs you may have defined in the master data. They
remain unchanged in the system even after cost generation, however.
The system does not generate the following costs, because it would require
additional information from the planner or because the costs are only relevant to
complex scenarios:
• Cost functions (production, shipment, procurement)

• Costs for means of transport
• Costs for the use of the available capacity of resources (costs for using the normal and maximum
available capacities or for falling short of the minimum available capacity)
In addition, the system does not consider the cost profile for weighting costs that
you can define for optimization-based planning.
Properties of the Generated Cost Model
The system ensures the following properties of the generated cost model:
• The model has no anomalies.

The system defines the costs such that undesired effects do not arise, such as:
•  Not covering a demand due to too low penalties costs for non-delivery
•  Planning a shipment due to too low costs at the destination location
•  Planning a shipment to save storage costs
The system also covers the demands as timely as possible.

• The model is stable.
The costs are, for example, independent of period length and transaction data.
• The model is coherent.
For example, the transportation costs increase proportionally to the shipment
length and the product value increases with the depth of production.
The system automatically uses the value 1 for the value of raw products
(products without input products). If you want the system to base the calculation
of the product value on the actual storage costs, you can make this setting in
the SNP or deployment optimizer profiles on the Automatic Cost Generation tab
page.
The system cannot guarantee this model property, because the first two
properties have higher priority and it is not always possible to guarantee all
three.
The generated cost model is independent from the costs defined in the master data
(except for possible consideration of storage costs). The system does not support a
combination of these two cost models (for example, completion of the master data
cost model).

The system calculates the costs based on the business goals you have defined. For
further information see Definition of the Business Goals.
Actions
S
1. Define your goals for optimization-based planning as described.

2. If, for example, you want to create a finite (capacity-based) plan, set the corresponding
indicator for the consideration of capacity restrictions on the General Restrictions tab page of the
SNP or deployment optimizer profile.
3. Set the Automatic Cost Generation indicator in the SNP or deployment optimizer profile.
4. Execute an SNP or deployment optimization run. For more information, see Running the
Optimizer in the Background, Running the Optimizer from the Interactive Planning Desktop, or
Running Deployment Optimization.
5. Display the application log that is in the Results Log section and contains information about
the generated costs. For more information about optimization logs, see Application Logs for
Optimizers.

Use
If you want to create an optimization-based production plan with the automatic cost
generation function, first define your business goals for planning. The system then
uses these goals to automatically generate the corresponding control costs, based
on which the optimizer makes planning decisions.
The main goal of planning is to maximize the service level. You can also define the
following additional goals:
• Consideration of demand and product priorities

• Consideration of procurement priorities
You define these goals in the SNP or deployment optimizer profile on the Automatic
Cost Generation tab page.
Features
Consideration of demand and product priorities
You can define priorities for three different priority classes of the demand and the
safety stock:
• Customer demand
• Corrected demand forecast
• Demand forecast
• Safety stock
The standard setting is that all priority classes and the safety stock have the same
priority.
In addition, you can define that the system also considers the priority of products.
You can enter this priority in the master data of the location product on the SNP 2
tab page. The system considers the product priority in combination with the
demand priority. You can define which priority is more important and is to be
considered by the system first.
To simplify this combination of both priority types, you must also subdivide the
product priorities into three classes of A, B, and C products.
The following figure shows exactly how the system proceeds if the demand priority
is more important than the product priority or vice versa:
If the demand priority is more important than the product priority, the system
covers all the demand with priority class 1 (such as customer demand) for all
location products first. It then covers all the demand with priority class 2, and so on.
If the product priority is more important, the system covers all the demand of all
priority classes for the location products with class A first, then all the demand for
the location products with class B, and so on.
Consideration of procurement priorities

You can define that the system considers the procurement priorities of production
process models (PPMs) or production data structures (PDS) as well as transportation
lanes. You define this priority in the master data of the PPMs/PDS and transportation
lanes (specific to the product). The procurement priority of sources of supply for in-
house production is always more important than the priority of sources of supply for
external procurement (same as the SNP heuristic procedure).
The system always tries to first cover all the demand of a period with receipts from
all the sources of supply available in this period (in the sequence of the
procurement priority of these sources of supply). Only after this does it try to cover
the demand with receipts from sources of supply from an earlier period. If the
system has to switch to an earlier or later period, it may not be able to follow this
principle in this period.
Costs Maintenance
Use
Costs play an essential role for optimization-based planning in Supply Network Planning (SNP). The
optimizer selects the plan with the lowest total costs from all the permitted production plans.
Use this function to define all costs used by the optimizer and assigned to the master data from a single
point of access. The master data is then automatically updated for the selected planning version.
To call the function, on the SAP Easy Access screen, choose Advanced Planning and Optimization
→Master Data → Application-Specific Master Data→ Supply Network Planning → Maintain
Costs(Directory) or Maintain Costs (Table).
Features
You can define the following costs:
• Production costs
• Storage costs
• Handling costs
• Transportation costs
• Costs for late delivery
• Costs for non-delivery
• Costs for using the available capacity of resources
• Cost functions
See Also
Master Data Setup for the Optimizer
Master Data Setup for the Deployment Optimizer
Prioritization of Customer Demands and Demands with

High Volume
Use
During optimization-based planning in Supply Network Planning (SNP), you can
prioritize customer demands and demands with high volume. In this way, you can
ensure, for example, that demands from important customers or from customers
with a high service level are covered by the SNP optimizer first.
Since the SNP optimizer searches on the basis of costs for the solution with the
lowest costs, you can influence the prioritization of demands by assigning
correspondingly high penalty costs for non-delivery or delay to the customer
demands and to the demands with high volume. These demands are then prioritized
by the SNP optimizer. If you want to create a profit-oriented plan that considers
both the costs and the revenue, you can specify the actual prices of the products as
the penalty costs for non-delivery of the products.
Moreover, the SNP optimizer can generate proposals for capacity reservation in
Production Planning and Detailed Scheduling (PP/DS). In this way, the demands that
you prioritized in the SNP optimizer can be planned as priority in PP/DS too.
Prerequisites
In order that the SNP optimizer can prioritize customer demands and generate
proposals for capacity reservation, the following prerequisites must have been met:
● You have created penalty cost groups.

● To do so, on the SAP Easy Access screen, choose Advanced Planning and Optimization →
Master Data ® Application-Specific Master Data ® Supply Network Planning ® Define Penalty Cost
Group.
You can use penalty cost groups to group demands so that you can assign
penalty costs to them.
● You have used BAdI /SAPAPO/SDP_RELDATA to assign the penalty cost groups to forecasts or
to sales orders. To do so, in Customizing for Demand Planning (DP), choose Business-Add-Ins
(BAdIs) → Release SNP/DP → Change Data During Release to SNP or R/3. For more information,
see the Implementation Guide (IMG).
● You have released the forecast from DP to SNP by specifying descriptive characteristics such as
Customer in a consumption group. For more information, see the documentation for DP under
Release of the Demand Plan to SNP.
Alternatively, you can use Core Interface (CIF) to transfer sales orders from SAP
ERP to SAP SCM. For more information, see the documentation for integration via
Core Interface under Integration of Orders.
● On the SNP 1 tab page in the product master data, you have assigned penalty costs for non-
delivery and for delay to the penalty cost groups. This makes the penalty costs customer-specific,
for example.
If you specify the actual prices as the penalty costs for non-delivery, you must
have activated Profit Maximization on the Solution Methods tab page in the SNP
optimizer profile.
In order that the SNP optimizer can prioritize demands with high volume, the
following prerequisites must have been met:
● You have defined a profile for quantity-based penalty costs (quantity profile) in the application-
specific master data. To do so, on the SAP Easy Access screen, choose Advanced Planning and
Optimization → Master Data ® Application-Specific Master Data ® Supply Network Planning →
Define Profile for Quantity-Based Penalty Costs.
You define quantity intervals in the profile and assign them to penalty costs. You
always enter the lower bound of the interval only. The upper bound is defined by
the lower bound of the next interval. The lower bound of the first interval is
always 0 and cannot be changed. The upper bound of the last interval is infinite.
Changes to the profile are valid for the next SNP optimization run.
● You have assigned the quantity profile to the product and to certain demand types on the SNP 1
tab page in the product master data. You can assign the profile in a time-dependent way or in a
time-independent way.
You can also specify the profile for certain penalty cost groups (see above) and
thereby assign the quantity-based penalty costs to certain customer demands.
In this case, the prerequisites described above for the prioritization of customer
demands must also be met. If you do not specify a penalty cost group (or you
specify group 000), the quantity-based penalty costs are valid for the relevant
demand type.
Activities
...
Prioritization of Customer Demands

You perform one or more consecutive optimization runs by creating a penalty cost
group profile for the demands to be prioritized in the next run and by specifying this
profile for the next run. For more information, see Penalty Cost Group Profile as well
as Running the Optimizer from the Interactive Planning Desktop and Running the
Optimizer in the Background.
Prioritization of Demands with High Volume

You have the following options:
● If you want to prioritize demands with high volume, you perform an optimization run for which you
have assigned a quantity profile to the products and demand types as described above.
● If you want to prioritize demands with high volume in a customer-specific way, you perform one
or more optimization runs for which you have assigned a quantity profile to the products, demand
types, and penalty cost groups, as described above, and for which you have specified a penalty
cost group profile for the optimization run.
Result
The result of these optimization runs is a production and distribution plan that
covers the demands according to their priority and that takes into account all
capacity constraints. However, it can be the case that demands cannot be covered.
Based on the optimization results, the SNP optimizer generates proposals for
capacity reservation in PP/DS that you can release in PP/DS. In PP/DS, you can
reserve capacity on the level of product, bucket, and descriptive characteristic. For
more information, see the documentation for Capable-to-Promise (CTP) in PP/DS
under Capacity Reservation.
Penalty Cost Group Profile

Definition
Profile that you can use for optimization-based planning in Supply Network Planning
(SNP) to specify that customer demands are to be prioritized.
Use
You can use the penalty cost profile to define that the system first covers demands
from penalty cost groups with a higher priority before covering those from penalty
cost groups with a lower priority. To define the profiles, on the SAP Easy Access
screen, choose Advanced Planning and Optimization → Supply Network Planning →
Environment → Current Settings → Profiles → Define SNP Penalty Cost Group Profiles and
then assign them to individual optimization runs in interactive planning or when
executing the SNP optimizer in the background.
Structure
The profile consists of the following components:
● Fields to enter profile names and the corresponding descriptions

● Table to enter penalty costs with normal priority
● Table to enter penalty costs with high priority
The profile transaction is intended to allow you to create multiple profiles for
multiple consecutive optimization runs. In the table for entering penalty costs with
normal priority, you specify in a step-by-step way the penalty cost groups that you
want to plan with higher priority in the next run. In the table for entering the penalty
costs with high priority, you specify the penalty cost groups that were planned with
priority in the previous run and that are to have a higher priority than the groups
that you specify under penalty costs with normal priority in the next run. If you
choose Generate Profile for Next Opt. Run, the system supports you when you create
the next profile, in other words, it copies the penalty cost groups from the previous
run to the Penalty Cost Groups with High Priority area.
Integration
You create the penalty cost groups in the application-specific master data and
assign them to penalty costs for non-delivery and delay on the SNP 1 tab page of
the product master data (see Prerequisites section under Prioritization of Customer
Demands and Demands with High Volume).
The SNP optimizer only takes the various penalty cost groups into account if you
specify a penalty cost group profile when running the optimizer. Otherwise, the
system uses the penalty cost values from the default penalty cost group 0000 for all
demands.
If you want to run the SNP optimizer with all the penalty cost groups, you should use
a penalty cost group profile in which all the penalty cost groups were defined under
penalty cost groups with normal priority.
Example
For example, you define multiple profiles for multiple consecutive optimization runs
as follows:
...
1. You define the first profile for the first optimization run by specifying an interval of penalty cost
groups under Penalty Cost Groups with Normal Priority that are to be planned by the optimizer with
the highest priority (for example, groups 1-3). You then execute the optimization run. In this run,
only these demands are planned.
2. You define the second profile for the second optimization run by specifying an interval of
penalty cost groups under Penalty Cost Groups with Normal Priority that are to be planned by the
optimizer with medium priority (for example, groups 4-6). Under Penalty Cost Groups with High
Priority, you specify the penalty cost groups planned previously with high priority (for example,
groups 1-3). If you choose Generate Profile for Next Opt. Run, the system copies the first three
penalty cost groups to the Penalty Cost Groups with High Priority area.
You then execute the second optimization run. If you have fixed the orders, the
demands from the penalty cost groups with high priority are considered during
planned, but they are not rescheduled. If you have not fixed the orders, these
demands are considered during planning and can be rescheduled, but they are
treated with higher priority than the demands from the other penalty cost
groups.
3. You define the third profile for the third optimization run by specifying an interval of penalty
cost groups under Penalty Cost Groups with Normal Priority that are to be planned by the optimizer
with low priority (for example, groups 7-9). Under Penalty Cost Groups with High Priority, you
specify the penalty cost groups planned previously with high and medium priority (for example,
groups 1-6). We recommend that you fix the orders for these penalty cost groups for the next run.
You then execute the third optimization run.
For optimization-based planning (see Optimization-Based Planning) in Supply Network Planning (SNP), you can
specify that the system considers sequence-dependent lot-size planning. This allows the SNP optimizer to optimize
the setup costs. First of all, you define setup transitions, setup costs, and setup times in a setup matrix. The SNP
optimizer then takes this data into account and determines the solution with the lowest costs.
An order sequence number is displayed for the SNP planned orders in the detail view of interactive SNP planning
and in the optimization results log. The SNP optimizer uses the order sequence numbers to generate proposals for
block planning in Production Planning and Detailed Scheduling (PP/DS).
Prerequisites
In order that the SNP optimizer can optimize the setup costs, the following prerequisites must have been met:
• You have created setup groups. To do so, on the SAP Easy Access screen, choose Advanced Planning
and Optimization Master Data Application-Specific Master Data Production Planning Setup
Group/Setup Matrix Maintain Setup Groups .
Alternatively, you can transfer the setup groups from a connected ERP system to SAP SCM. For more
information, see SAP Library at http://help.sap.com under SAP Business Suite SAP Supply Chain
Management SAP SCM 7.0 SAP Advanced Planning and Optimization (SAP APO) Production
Planning and Detailed Scheduling (PP/DS) PP/DS Process Interactive Planning Detailed
Scheduling Topics Detailed Scheduling Setup Matrix Integration of Setup Groups .
The production data structure (PDS) used must contain a setup group. If you have transferred setup groups
from the ERP system and have specified a setup group in the routing, they are automatically transferred to
the relevant PDS. The function supports PDS only. In other words, production process models (PPMs) are
not supported. PDS that were created using iPPE are not supported either.
• You have defined the setup statuses, setup transitions and the corresponding setup costs and setup times in
the setup matrix. To do this, on the SAP Easy Access screen, choose Advanced Planning and
Optimization Master Data Application-Specific Master Data Production Planning Setup
Group/Setup Matrix Maintain Setup Matrix .
Note that the SNP optimizer considers standard setup transitions only. In other words, it does not consider
exception setup transitions. For more information, see SAP Library at http://help.sap.com under SAP
Business Suite SAP Supply Chain Management SAP SCM 7.0 SAP Advanced Planning and
Optimization (SAP APO) Master Data Application-Specific Master Data Master Data for
Production Planning Setup Matrix .
• You have specified the setup matrix in the master data of a single-mixed resource or a bucket resource on
the Time-Cont. Capacity tab page. Other resource types are not supported.
• You have set the PerLotSize indicator for the resource to Sequence-Dependent Lot-Size Planning on the
SNP Bucket Cap tab page.
A PDS can use only one resource for which this indicator has been set.
A PDS must not exceed any planning period (bucket) within the defined time period for sequence-
dependent lot size planning.
• In the SNP optimizer profile, you have selected Discrete Optimization as the optimization method and, in
the Sequence-Dependent Lot Size field on the Discrete Constraints tab page, you have specified a time
period in which the SNP optimizer takes sequence-dependent lot sizes into account.
The PDSs that run on sequence-dependent resources must not exceed any planning period (bucket).
If you want the SNP optimizer to generate proposals for blocking planning in PP/DS, the following prerequisites
must also be met:
• You have activated block planning in Customizing for SNP under Basic Settings Maintain Global
SNP Settings . This is also a prerequisite for displaying information about the blocks in the detail view of
interactive SNP planning.
Features
• The sequence-dependent lot-size planning function offers the following:

• The SNP optimizer considers the setup transitions, setup costs, and setup times that you defined in the setup
matrix.
• The SNP optimizer checks the setup groups of the production data structures used and determines the
optimum sequence of PDS and created planned orders on the basis of costs.
• The setup costs are displayed in the planning result of optimization in both interactive SNP planning and in
the optimization results log.
• The sequence number of the order is displayed for the SNP planned orders in the detail view of interactive
SNP planning and in the optimization results log.
Block Planning
The SNP optimizer uses the order sequence numbers to generate proposals for block planning in PP/DS. These
proposals can be loaded to PP/DS. For more information, see the SAP Help Portal at http://help.sap.com under
SAP Business Suite SAP Supply Chain Management SAP SCM 7.0 SAP Advanced Planning and Optimization
(SAP APO) Production Planning and Detailed Scheduling (PP/DS) Planning with Characteristics Functions
for Block Planning Downloading of SNP Blocks .
In SNP, planned orders are combined to form blocks. Since these SNP blocks deviate from the PP/DS blocks, some
of the prerequisites described in the PP/DS documentation mentioned above must be met.
In the detail view of interactive SNP planning, you can display the start and end dates and times of the blocks for the
planned orders. If you select a planned order in the detail view and choose Block View, the system displays all the
orders belonging to a block, together with the relevant detailed information. You can use Bucket View to switch back
to the normal detail view.
Activities
You run the SNP optimizer in interactive SNP planning or in the background. For more information, see Running
the Optimizer from the Interactive Planning Desktop and Running the Optimizer in the Background.
You then display the results in interactive SNP planning.

Use
In some industry sectors (such as the process industry), setup activities have a
great influence on lot size planning. If the setup costs are relatively high in
comparison to the storage costs, orders are grouped into large lots to save on set
up costs. For this reason, it is possible to run a cross-period lot size planning as part
of optimization-based planning within Supply Network Planning. Here, the optimizer
takes into account the setup statuses from the previous bucket if the same
production process model (PPM) is being used to produce a product in that bucket.
This means that the optimizer only schedules one setup operation per lot size. For
this setup operation, the system then calculates the setup costs and setup
consumptions (fixed resource consumption and material consumption) that were
defined in the PPM for the resource set with the Cross-Period Lot Size indicator.
The SNP optimizer does not support multi-level cross-period lot size planning,
meaning that lot size planning can only be done at production level.
Integration
1. • Within the campaign planning business process, cross-period lot size
planning represents the preliminary stage of the actual campaign creation
that is done in Production Planning and Detailed Scheduling (PP/DS). During
planning, the SNP optimizer creates SNP planned orders that correspond to a
production campaign that is created at a later point in PP/DS. You can convert
these SNP planned orders into PP/DS orders. For more information, see
Converting SNP and CTM Orders into PP/DS Orders.
1. • The optimizer is also able to consider setup statuses resulting from
already planned PP/DS orders. When doing this, it is possible to run an SNP
PPM in a bucket (period) without taking into account setup expenses, if there
is a PP/DS order with the associated PP/DS PPM, or if the corresponding setup
expenses can be adopted from the previous bucket.
Prerequisites
The steps listed below are general prerequisites for running the SNP optimizer:
1. • Planning Area Administration

2. • Master Data Setup for the Optimizer
3. • Model/Version Creation
4. • Supply Chain Model Setup
5. • Release of the Demand Plan to SNP
The following are special prerequisites for cross-period lot size planning:
1. • Resource master data
1. − The optimizer only takes into account the setup statuses from
previous buckets for the resource for which the cross-period lot size
indicator has been set.
2. • Production process model (PPM)
1. − The PPM is permitted to use a maximum of one resource only for
which the cross-period lot sizeindicator has been set.
2. − The PPM is not permitted to use any other resources that have
been specified with a fixed resource consumption.
3. − The PPM duration must be less than or equal to the smallest bucket
from the planning buckets profile used.
4. − The minimum PPM lot sizes and the discrete (integer value) lot
sizes refer to the cross-period lot quantity.
5. − The optimizer plans a maximum of one setup operation per bucket.
Profiles
In Supply Network Planning, you have also maintained the relevant profiles for SNP
optimization, in particular the SNP optimizer profile (from the Implementation Guide
(IMG), choose SAP Advanced Planner and optimizer (SAP APO) ® Supply Chain
Planning ® Supply Network Planning ® Profiles ® Define SNP Optimizer Profiles). For more
information, see Optimization Profiles and the corresponding Implementation Guide
(IMG) documentation.
In particular, you have made the following settings for cross-period lot size planning
in the SNP optimizer profile:
1. • You have chosen Discrete Optimization as your optimization method.

2. • You have entered the horizon over which you want the optimizer to take
into account the setup statuses from this previous bucket in the Cross-Period
Lot Size field from the Discrete Constraints tab page. The optimizer can only
do this if the PPM from the previous bucket is used to produce a product.
3. • If you want the optimizer to take account of setup statuses resulting from
already planned PP/DS orders, you must have activated the indicator Cross-
Period Lot Size Planning on the Integration tab page. A prerequisite for this is
that the corresponding PP/DS PPM must be assigned to the SNP PPM.
Activities
1. • You run the optimizer from the interactive planning desktop or in the
background. For more information, see Running the Optimizer from the
Interactive Planning Desktop and Running the Optimizer in the Background.
For general information on the SNP optimizer, see Optimization-Based
Planning.
1. • The optimizer determines the most cost-effective solution to fulfil the
demands. For example, to decide about lot sizes, the optimizer uses storage
costs and setup costs. Having larger lot sizes and only one setup operation
per lot size saves on setup costs but results in higher storage costs. With
smaller lot sizes, multiple setups mean that more capacity is required and
this results in higher setup costs.
1. • You display the individual stages and final results of the optimization run
in interactive planning on the Optimization tab page within the optimizer
window. You also receive a list of the costs determined by the optimizer.

Use
When you execute an optimization-based planning function in Supply Network
Planning (SNP) in the background (mass processing), the system automatically
generates an application log. Amongst other things, this log contains planning
results, such as planned orders and stock transfers created, as well as error,
warning, and information messages. The input data for the optimization run and the
costs of the solution determined by the optimizer are also displayed, for example.
The central Optimizer Log Data function is available for accessing optimization run
logs. From the SAP Easy Access screen, choose Advanced Planning and Optimization
® Supply Network Planning ® Reporting ®Optimizer Log Data. You can use this function to
access the following SNP planning functions:
• SNP Optimizer
• Deployment Optimizer
• Capacity Leveling (optimization-based method)
• Sourcing of Forecast
Features
• The Optimizer Log Data function provides an overview of the generated logs. Amongst other
things, the list of logs contains the following data:
•  Log status
A traffic light or flag indicates whether the optimization run is still in progress,
has already ended, or was terminated with a message (see F1 help).
•  Log creator
•  Optimizer profile used
•  Start and finish time of the run

•  Runtimes of the individual optimization steps
An optimization run has three steps (data reading, model consistency check,
and solution calculation, as well as order creation).
•  Total costs of solution
•  Log expiration date
You specify the log expiration date globally for all optimization logs in
Customizing for Advanced Planning and Optimization (APO) under Basis
Settings → Optimization ® Basic Functions ® Maintain Global Settings. However,
you can also change this date for one specific optimization run by choosing
Change Expiration Date. The log is automatically deleted after the
expiration date if you execute the /SAPAPO/OM_REORG_DAILY report.
You can also delete the log from the list, set filters and sort entries.
• If you double click a log or choose Display Log, you receive the following data and sub-logs for
the log.
•  Input Parameter
Contains the settings that you made on the initial screen for the planning
function.
•  Location Products
Contains the location products selected for the optimization run.

•  Deletion Time Period
Specifies a time period in which the system deletes existing planned orders
and stock transfers before actual optimization.
•  Input Log
Contains the input data considered by the system during the optimization run
(that is, master data and transaction data). The data is divided into a number
of tables (such as ET_LOCMAT). You can display the content of these tables
on the right-hand side of the screen. For more information, see Optimization
Input Log.
•  Results Log
Contains all results of the optimization run, such as planned orders, stock
transfers, resource consumption, costs, and penalty costs. The data is divided
into a number of tables (such as ET_PROMO). You can display the content of
these tables on the right-hand side of the screen.
•  Result Indicators
Contains indicators that display the quality of the optimization solution, such
as service level and shortfall of safety stock. For more information, see Result
Indicators.
•  Explanations
Contains the results of an explanation tool run (see below).

•  Extended Results Log
In this log, you can display the results of the optimization run in the
interactive SNP planning form.
•  Message Log
Contains error messages, warning messages, and information messages

generated by the system during the optimization run. They are ordered
according to meaning, that is, whether they refer to the optimization run
settings or to the three main steps of the run.
•  Trace File
All individual optimization run steps are logged in this text file. It is saved on
the optimization server, but you can also download it to your own computer.
•  Costs
Contains detailed information about the costs of the solution determined by

the optimizer. For more information, see Resulting Costs of Optimization.
•  Solution Quality
Contains the costs of the best solution determined by the optimizer up to the
time displayed. If you used a decomposition method, you can also relate the
costs the partial problem solved up to this time.
You can use the log to determine whether you can reduce the optimizer
runtime without effecting solution quality.
Note that the input log and the results log, as well as the deletion time period, are only
displayed if you have set the Write All Log Data indicator in the optimizer profile being used.
Even if an error occurred in the first step of the optimization run (data reading), the log may
not be available.
• You can also download the input log and the results log to your own computer. To do this, choose
Download Input Log or Download Results Log. The logs are then saved in RELATIOM text
format.
• If you select a log and choose Explain, you go to the Explanations of SNP Optimization
Resultsscreen. From this screen you can execute the explanation tool which explains two important
exceptional situations of an optimization run: non-deliveries and shortfall of safety stock.
For more information, see Explanation of the Optimization Results.
Optimization Input Log
Definition
Log generated during an optimization run in Supply Network Planning (SNP). It
contains all input data considered by the system during the optimization run (that
is, master data and transaction data). The data is utilized in numerous tables (such
as ET_LOCMAT).
Use
The input log is part of the application log. To access the log, on the SAP Easy
Access screen, choose Advanced Planning and Optimization → Supply Network Planning
→ Reporting → Optimizer Log Data. For more information, see Application Logs for
Optimizers.
You can download the log and give it to SAP support as a text file for analysis.
Structure
The individual sections of the log are detailed below.
Legend
Flag: X = Active, ' ' = Inactive

Prof: SNP optimizer profile
Units: BTime = Base unit of time (days)
BCurr = Base currency
BProd = Base unit of measure of the product
HanUn = Handling unit
StoUn = Storage unit
BRes = Base unit of measure of the resource
ES_CTRL
These entries describe the general properties of the model. The entries are
determined from the SNP optimizer profile or directly from the model. Discrete
(integer value) transport lots are displayed in the History (‘trace file’) of
Optimization Runs (choose Tools → APO Administration → Optimization → Log Display).
NBUCK Number of buckets

NPROD Number of products
NLOCS Number of locations
NSUBL Number of sublocations
NPROM Number of production process models
NRESO Number of resources
NREFA Number of resource families
NARCS Number of arcs
NFLEE Number of fleets
NDEMC Actual number of demand classes
NDEMA Number of demand vectors
DISRF Prof: End bucket for increasing
production resource discretely
DISRZ Prof: End bucket for using fixed
production resource consumption
DISTR Prof: End bucket for using discrete
fleet on transportation lanes
DISPR Prof: End bucket for using integral
PPM
KAMPA Prof: End bucket for campaign + D416
planning
TRLOS Prof: End bucket for using minimum
transportation lot size
PRLOS Prof: End bucket for using minimum
production lot size
COSTR Prof: End bucket for using
transportation cost function
COSPD Prof: End bucket for using
production cost function
COSPC Prof: End bucket for using
procurement cost function
SEQLS End bucket for sequence resource
planning
NPENG Number of penalty groups
NQTAA Number of quota arrangements
NCHAI Number of supersession chains
NFFC Number of form-fit-function classes
NSTUP Number setup matrices
NPROG Number of product groups
ET_INEXKEY
These entries are the external keys for internal object keys. In particular, there is a
list of calendar data for the day numbers, and a list of product and location numbers
for the GUIDs.
INKEY GUID (unique internal key)

EXKEY Corresponding external key
ET_BUCKDF
These entries show the bucket definition (time intervals) upon which all optimizer
planning is based. The source of this information is either the selected planning
buckets profile or the planning start and end date.
BUCKE* Bucket no.

VALTO End date of the bucket (day no., 1st day is BTime
1/1/1970)
VALFR Begin date of the bucket (day no., 1st day BTime
is 1/1/1970)
ET_MATERIAL
The validity period of all products selected for optimization is stored here. At
present, this always encompasses the entire planning horizon.
MATID* Product GUID

BCKTO Valid to bucket no.
BCKFR Valid from bucket no.
ET_LOC
Information about the existence or non-existence of a defined handling capacity
(handling resource) is stored here for locations.
LOCID* Location GUID

RESIN Handling-in resource GUID or dummy resource,
if no handling-in resource is maintained
MAXIN Prof: Flag: Handling-in resource active (not
activated, if dummy resource is used)
RESOU Handling-out resource GUID or dummy
resource, if no handling-out resource is
maintained
MAXOU Prof: Flag: Handling-out resource active
(not activated, if dummy resource is used)
ET_SUBLOC
A storage resource is defined here with information about whether it can be
extended. SUBID is currently the resource ID. The source of this information is the
location master and, if in existence, storage resource maintenance. Extension is
allowed if the resource has two capacity variants.
SUBID* Storage resource GUID or dummy resource, if

no storage resource is maintained
MAXFL Prof: Flag: Storage resource active (not
activated, if dummy resource is used)
ET_LOCMAT
The properties of location-dependent products are shown here. Resource
consumption is listed, in particular. The source for this is the location product
master.

MATID* Product GUID
SUBID Storage GUID
HCOST Storage cost BCurr/BProd
BUCFL Prof: Flag: Storage cost: Multiply by bucket
length
SSPEN Penalty for not covering safety stock BCurr/BProd
MAXST Maximum stock level of the product
MAXFL Flag: Maximum stock level active
STOCK Initial stock BProd
CONIN Consumption of input handling capacity HanUn/BProd
COSIN Handling-in cost BCurr/BProd
CONOU Consumption of output handling capacity HanUn/BProd
COSOU Handling-out cost BCurr/BProd
RECTI Goods receipt processing time in days BTime
ISSTI Goods issue processing time in days BTime
CACON Storage capacity consumption StoUn/BProd
WASFL Flag: Shelf life penalty is active
WASTE Shelf life: Penalty for wasted quantity BCurr/BProd
STODU Shelf life: Storage duration BTime
FCOST Linear procurement cost BCurr/BProd
FPERF Procurement permitted and/or product subject
to incremental optimization
SSMTH Safety stock method
PLREL X if PPM/PDS relevant for planning
ET_PROGRP
This table contains the master data of the product groups for which you can define
quota arrangements.
MATID Product ID
PROGR Product group
ET_QTAHEAD
This table contains the header master data of the quota arrangements.
QTAID Unique key for quota arrangement header

LOCID Location ID
MATID Product ID
PROGR Product group
VALFR Valid-from date
VALTO Valid-to date
ET_QTAITEM
This table contains the item master data of the quota arrangements.
QTAID Unique key for quota arrangement header

SRCLO Source location ID
ARCID Relationship between two locations
PROID Source PPM
FPERF Switch external procurement (‘X’ = external
procurement, ‘ ‘ = otherwise)
QUOTA Quota arrangement number
LOPEN Penalty for deviation below target quantity
UPPEN Penalty for deviation above upper quantity
ET_RCPBND
This table contains the data for the receipt bound that you can define as a time-
based constraint.
LOCID Location ID
MATID Product ID
BUCKE Bucket
LOWBN Lower limit
UPPBN Upper limit
LOPEN Penalty for deviation below lower bound
UPPEN Penalty for deviation above upper bound
BNDFL Upper limit active flag
ET_RESOURCE
Production resources that are used in the production process models are listed here
(see the ET_PRORES section below). UNIVO is currently always equal to 1.
RESID* Resource GUID

RFAID Resource family GUID (currently the same as
resource)
UNIVO Unitary volume BRes
KAMPA Flag: Resource is a campaign resource
SETID ID of setup matrix
ET_SETUPMATRIX
This table contains the data for the setup matrix.
SETID Setup matrix ID

GRFRO Setup group ID
GROTO Setup group ID
SCOST Setup cost
STIME Setup times in sec.
ET_RESFAM
Production resources are allowed to be extended here if a second capacity variant
has been defined in the resource master. The resource family is currently always
the same as the production resources (one-to-one).
RFAID* Resource family ID

MAXFL Flag: Resource has a capacity constraint
DISCR Prof: Flag: Discrete increase of resource
family
ET_FLEET
Fleet refers to the transportation resource that has been specified for a
transportation lane. A possible extension and the costs related to it are determined
from the resource’s second capacity variant.
FLEID* Fleet GUID

MAXFL Flag: Consider maximum fleet capacity
TUNIA Capacity 1 of one truck TraUn1
TUNIB Capacity 2 of one truck (not used) TraUn2
TUNIC Capacity 3 of one truck (not used) TraUn3
ET_ARC
All the transportation lanes that have been defined for the model in the Supply
Chain Engineer are listed here. ARC refers to a transportation lane/means of
transport combination.
ARCID* Arc GUID

FLEID Fleet GUID
LOCFR Location from GUID
LOCTO Location to GUID
TTYPE ID for means of transport
DURAT Duration of shipment (base time unit) BTime
RNDTR Bucket offset (rounding limit for
transportation times)
TCTYP Variable transportation cost for the fleet BCurr/TraUn1
DISCR Flag: Using discrete transportation fleets
RLDUR Resource load duration BTime
ET_ARCMAT
Product-dependent properties for the transportation lane are shown here. Data is
taken from the Supply Chain Engineer. Standard entries are generated if the
product has not been assigned to the transportation lane and the All Products
indicator has been set at the transportation lane. The lot size information is taken
from the lot size profile (transportation lanes) defined at the transportation lane.
ARCID* Arc GUID

MATID* Product GUID
VALTO Valid to date (base unit of time) BTime
VALFR Valid from date (base unit of time) BTime
MINLO Minimum number of lots TRVOL
MAXLO Maximum number of lots TRVOL
MAXFL Flag: MAXLO active
TRVOL Lot size in product units BProd
TCONA Capacity consumption for 24 hours TraUn1/BProd
TCONB Capacity consumption for the transportation TraUn1/BProd
time that is less than 24 hours
TCONC Capacity consumption (not used)
TCOST Variable transportation cost for "arc BCurr/BProd
product"
SUBCO Flag: ‘X’ Product will be subcontracted
ET_LOCC
The handling resource’s available capacity is listed here. Figures are determined
from the resource’s first capacity variant. Gaps in the intervals are defined by the
resource calendar or shipping calendar of the location.
RESID* Handling resource GUID

VALTO* Valid to date (base unit of time) BTime
MAXHA Handling capacity HanUn/BTime
COUND Minimum resource consumption
UNPEN Penalty per unitary volume dropping minimum BCurr/Univo
capacity
ET_LOCUC
A possible extension of the handling resource’s available capacity is listed here.
Figures are determined from the resource’s second capacity variant by subtracting
the first capacity variant values. Gaps in the intervals are defined by the resource
calendar or shipping calendar of the location.
RESID* Handling resource GUID

INCHA Upper bound for increasing handling capacity HanUn/BTime
INPEN Penalty per unitary volume for increasing BCurr/Univo
capacity
ET_SUBLOCC
The storage resource’s available capacity is listed here. Figures are determined
from the resource’s first capacity variant. The interval gaps are defined by the
resource calendar.
SUBID* Sublocation GUID

MAXSL Capacity volume of storage (sublocation) StoUn
capacity
ET_SUBLOCUC
A possible extension of the storage resource’s available capacity at a location is
listed here. Figures are determined from the resource’s second capacity variant by
subtracting the first capacity variant values. The interval gaps are defined by the
resource calendar.
SUBID* Sublocation (storage) GUID

INCSL Upper bound for increasing storage capacity StoUn
capacity
ET_RESC
The production resource’s available capacity is listed here. Figures are determined
from the resource’s first capacity variant. The interval gaps are defined by the
resource calendar.

MAXRE Production resource capacity BRes/BTime
capacity
CCOST Cost per unitary volume for capacity BCurr/Univo
ET_RESFAMC
A possible extension of the production resource’s available capacity is listed here.
Figures are determined from the resource’s second capacity variant by subtracting
the first capacity variant values. The interval gaps are defined by the resource
calendar.
RFAID* Resource family GUID

INCRF Upper bound for increasing production Univo/BTime
resource
capacity
ET_FLEETC
The transportation resource’s available capacity is listed here. Figures are
determined from the resource’s first capacity variant. The interval gaps are defined
by the resource calendar.
FLEID* Fleet GUID

MAXFL Capacity measured in trucks Truck/BTime
UNPEN Penalty per unitary volume dropping minimum BCurr/Truck
capacity
ET_FLEETUC
A possible extension of the transportation resource’s available capacity is listed
here. Figures are determined from the resource’s second capacity variant by
subtracting the first capacity variant values. The interval gaps are defined by the
resource calendar.
FLEID* Fleet GUID

INCFL Upper bound for increasing fleet capacity Truck/BTime
INPEN Penalty per unitary volume for increasing BCurr/Truck
capacity
ET_PROMO
The properties of the production process model (plan or PPM) are stored here. A
prerequisite, however, is that the PPM has been assigned to the model in the Supply
Chain Engineer. This information is defined in master data maintenance for the PPM.
Time-dependent PPMs are converted into multiple entries for the optimizer, and the
validity period of each one is set accordingly. The master resource is the PPM
calendar resource.
PROID* Production process model GUID

LOCID Location GUID
MATID Product GUID
LOTSZ Fixed lot size of the location product BProd
BCKTO Valid to date in buckets
BCKFR Valid from date in buckets
PMINQ Minimum production lot size ProMod
PMAXQ Maximum production lot size ProMod
MAXFL Flag: PMAXQ active
DURAT Duration: 0 = one day, 1 = two days BTime
DISCR Flag for using discrete production
PCOST Variable cost of PPM BCurr/ProMod
RNDPR Bucket offset
RESID Resource GUID for calendar
GRFRO Setup group of this PPM/PDS
PLREL X if PPM/PDS relevant for planning
ET_PRORES
Consumption of production resources for the PPM is listed here, as defined in the
production process model master data in Mode → Bucket consumption.

OFSTO* Consumption time offset BTime
BCKTO* Valid to date of bucket interval
VCONS Variable consumption of the resource BRes
FCONS Fixed consumption of the resource BRes
ET_PROMAT
The product flow for the PPM, as defined in the Products section of production
process model master data, is listed here. It represents the bill of materials (BOM)
structure, where finished products have a plus sign and input products a minus sign.

MATID* Product GUID
OFSTO* Input/output time offset BTime
BCKTO* Valid to date of bucket interval
OUTIN Output(+) or input(-) quantity BProd
FCONS Fixed input(-) quantity BProd
ET_RESINI
This table contains the initial setup statuses of the resources for cross-period lot
size planning (set up or not set up).

EDATE* End date BTime
BDATE* Start date BTime
QUANT Output quantity for master product BProd
APPLI Application: P->PP/DS S->SNP
SETUP Flag: Order with setup
SEQID Sequence ID
ET_LOCPROD
The required safety stock (target stock levels), fixed demands (FPROD with minus
sign), and receipts for the products are defined in this table. The latter entries result
from planned orders and stock transfers that had been fixed before the optimizer
was run. This fixing is done both manually and when orders are transferred to the
PP/DS application. Receipts and issues are also fixed when the optimizer has been
run incrementally (for a subset of products from the model).

MATID* Product GUID
BUCKE* Date bucket of safety stock and FPROD
SAFTY Safety stock (not a demand!) BProd
MAXST Maximum stock level of the product BProd
SAPEN Penalty for not covering safety stock BCurr/BProd
STPEN Penalty for violating the maximum stock BCurr/BProd
level
FPROD Confirmed production, includes intransit BProd
quantities
SVTTY Safety days’ supply
FDIST Aggregated distribution quantity
FSUBST Aggregated substitution quantity
ET_DEMCLTIM
The maximum delay that is to be allowed for finished products is defined here. The
values are taken from the product master (the SNP 1 tab). There are currently only
three categories: 1 for customer demands, 2 for corrected demand forecasts, and 3
for demand forecasts. Costs for delivering the finished products late, or for not
delivering them are also defined. The values are taken from the product master (the
SNP 1 tab). The values are not defined as time-dependent in SAP APO, meaning that
BCKTO is the same as the planning end date.
DEMCL* Demand class (highest priority = 1)

MATID* Product GUID
BCKTO* Valid to bucket
LAPEN Penalty for lateness BCurr/(BTime*BProd)
MAXLA Maximum lateness BTime
NDPEN Penalty for not delivering BCurr/BProd
ET_DEMAND
This table contains all the customer demands and forecast demands that have been
read for the model from liveCache.

MATID* Product GUID
BUCKE* Demand date given in bucket
DEMAN Quantity of demand BProd
ET_PROCBND
Target procurement corridor.

MATID* Product GUID
BUCKE* Bucket
LOWBN Lower bound BProd
UPPBN Upper bound BProd
INITV Initial value (result of previous run) BProd
BNDFL Flag: Upper bounds are active
ET_PRODBND
Target production corridor.

BUCKE* Bucket
LOWBN Lower bound ProMod
UPPBN Upper bound ProMod
INITV Initial value (result of previous run) ProMod
ET_TRANBND
Target stock transfer corridor.
ARCID* Arc GUID

MATID* Product GUID
BUCKE* Bucket
ET_STCKBND
Target stock level corridor.

MATID* Product GUID
BUCKE* Bucket
ET_DELIBND
Target demand fulfillment corridor.

MATID* Product GUID
DELAY* Lateness measured in buckets
BUCKE* Bucket
ET_TRANCOS
Stock transfer cost functions are defined here. These functions are analyzed on the
basis of this formula: Cost = FIXCO + VARCO* (X – ORIGN). The cost function is
assigned to the product-dependent transportation lane in the Supply Chain
Engineer.
ARCID* Arc GUID

ORIGN* Smallest value TraUn1
FIXCO Fixed cost BCurr
VARCO Variable cost BCurr/TraUn1
ET_PRODCOS
Production cost functions are defined here. These functions are analyzed on the
basis of this formula: Cost = FIXCO + VARCO* (X – ORIGN). The cost function is
assigned to the plan in master data maintenance for the production process model.

ORIGN* Smallest value ProMod
VARCO Variable cost BCurr/ProMod
ET_PROCCOS
Procurement cost functions are defined here. These functions are analyzed on the
basis of this formula: Cost = FIXCO + VARCO* (X – ORIGN). This cost function is
assigned to the product in the location product master.

MATID* Product GUID
ORIGN* Smallest value BProd
VARCO Variable cost BCurr/BProd
ET_CHAIN
This table contains the master data for the supersession chains (product
interchangeability).
GROUPID Interchangeability group identification

LOCID Location ID
PRODOLD Old product ID
PRODNEW New product ID
VALIDFROM Validation date from
DIRECTION Direction of interchangeability (‘F’ =
forward, ‘I’ = full )
USEUP Use-up date
ET_FFF
This table contains the master data for form-fit-function classes (FFF classes,
product interchangeability).
GROUPID Interchangeability group identification

LOCID Location ID
PRODID Product ID
LEADPRODFLAG Flag for leading product (‘X’ = leading
product, space = non-leading product)
Resulting Costs of Optimization

Definition
Log generated during an optimization run in Supply Network Planning (SNP). It contains detailed
information about the costs of the solution determined by the optimizer.
Use
The log is part of the application log that you can access by selecting Advanced Planning and
Optimization → Supply Network Planning → Reporting → Optimizer Log Data from the SAP Easy Access
screen. For more information, see Application Logs for Optimizers.
Structure
The individual fields of the log are detailed below.
Field Information displayed
User The planner's name.
Current date The date the Optimization run was executed.
Time The time when the Optimization run was executed..
version The planning version used for the optimization run.
Optimizer profile The optimizer profile used for optimization run.
Cost profile The cost profile used for optimization run.
Bound profile The SNP optimization bound profile used for optimization run.
Total costs The total costs associated with the solution proposed by the system.
The cost categories are displayed in total values for all objects
throughout the supply chain. The total costs are made up of all the cost
categories displayed in this log.
Production costs The total production costs for this plan based on the pieces produced
using the production process models PPMs with the associated cost
data, displayed in total values for all objects throughout the supply
chain.
Procurement costs The total procurement costs for this plan.
Storage costs The total storage costs for this plan based on the capacity
consumption of products stored at the storage resource, displayed in
total values for all objects throughout the supply chain.
Storage expansion The total costs incurred as a result of a requirement to expand storage
capacity for this plan displayed in total values for all objects throughout
the supply chain.
Penalty costs for The total penalty costs incurred because the safety stock level falls
safety stock deficit below the specified requirement for safety stock for this plan displayed
in total values for all objects throughout the supply chain.
Field Information displayed
Transportation costs The total transportation costs for this plan displayed in total values for
all objects throughout the supply chain.
Handling capacity The total costs incurred as a result of a requirement to expand the
expansion handling capacity of one or more resources for this plan displayed in
total values for all objects throughout the supply chain.
Transportation The total costs incurred as a result of a requirement to expand the
capacity expansion transportation resource capacity for this plan displayed in total values
for all objects throughout the supply chain.
Production resource The total costs incurred as a result of a requirement to expand the
expansion production resource capacity for this plan displayed in total values for
all objects throughout the supply chain.
Delay penalty The total penalty costs incurred as a result of all deliveries that are late
displayed in total values for all objects throughout the supply chain.
Shortfall penalty The total penalty costs incurred as a result of all deliveries of all
products that are less than the quantity ordered displayed in total
values for all objects throughout the supply chain.
Penalty costs for The total penalty costs incurred for exceeding maximum stock on
exceeding maximum hand.
stock on hand
Penalty costs for The total penalty costs incurred for falling short of the minimum
falling short of resource utilization defined in the resource master data.
minimum resource
utilization
Result Indicators
Definition
Indicators that show the quality of an optimization solution.
Use
If you have successfully executed an optimization run and have created a log for
this run, the log contains a series of result indicators. They show the quality of the
optimization solution with reference to the following factors:
• Demand Fulfillment
• Stock Level
• Resource Utilization
From the SAP Easy Access screen, you choose Advanced Planning and Optimization
→Supply Network Planning → Reporting →Optimizer Log Data. You then select an
optimization run with a double-click. The tree structure of the logs contains the
entry Result Indicatorswith the two aggregation levels Model-Dependent Indicators and
Location Product-Dependent Indicators.
Structure
The system calculates the following indicators for the quality of an optimization
solution:
• Demand Fulfillment
•  Service level (in percent)
•  Delayed demand fulfillment (in percent)
•  Average delay (in days)
The system also calculates these indicators separately for the following priority
classes:
•  Customer requirement
•  Demand forecast
•  Corrected demand forecast
•  “Pseudo-hard” demand (if you have made the setting in the optimizer
profile that the system considers the dependent demand and/or distribution
demand of fixed orders as a pseudo-hard constraint. That means that the
system may allow shortages for which it calculates penalty costs).
• Stock Level
•  Fulfillment of safety stock demand in percent
•  Average stock level
• Resource Utilization
The system calculates the resource consumption for the following resource
types.
•  Production resources
•  Storage resources
•  Handling resources
You can also display the resource utilization for each period in the capacity view
of interactive SNP planning. The capacity view always shows the current
resource utilization based on the data saved in liveCache. However, the data
calculated by the explanation tool is available for as long as the output log of the
optimization run is available.
The system calculates the result indicators at the level of the model and each
location product or resource, and displays this data directly in the optimization run
log or under the Result Indicators entry. The indicators for the utilization of the
individual resources are displayed in the result log.
To aggregate the data of each location product at different levels (such as location
level or product level), you can transfer the data to the SAP NetWeaver Usage Type
Business Intelligence (BI) using the DataSource 0APO_SNP_INDICATOR. For more
information, see the documentation for component SAP NetWeaver under BI Content
→ Supply Chain Management → Planning. You can also simulate a simple aggregation
with the SAP List Viewer (ALV).
The following table shows the aggregation levels at which the result indicators are
displayed in the optimization log:
Servic Delay Averag Service Delay in Averag Averag Safety Utilizatio

e Level in e Delay Level Percent e Delay e Stock Stock n per
Percen per per per Level Shortfal Resource
t Deman Deman Deman l
d Class d Class d Class
Model x x x x x x x x
Location x x x x x x x x
Product
Resourc x
e
Explanation of the Optimization Results

Use
Optimization-based planning in Supply Network Planning (SNP) pursues a global
solution approach by considering all restrictions and costs simultaneously and
across the entire model. It therefore frequently finds a better solution than is
possible with other planning methods. However, the results of the optimization run
are not always easy to understand.
You can use the explanation tool to have the system explain two significant
exceptional situations of an optimization run:
• Non-delivery
• Shortfall of safety stock
This function shows you the possible causes for the exceptional situations in the
optimization run log. You can use the causes shown to check whether you can solve
the problem by increasing capacities or extending horizons, for example. The
system also suggests additional orders that you could use to remedy the missing
quantities.
Among other things, you can specify the location products for which you want the
explanation, and how detailed it should be.
Prerequisites
• You have executed an optimization run and created a log for this run (that is, you have set the
Write All Log Data indicator in the SNP or deployment optimizer profile). The explanation tool refers
to the result of the optimization run as you see it in the log.
• Between the optimization run and explanation run, you have not changed the SNP or deployment
optimizer profile you used for the optimization run. You have also not changed the optimization-
relevant settings in planning version management.
• In the case of a deployment optimization run, you have chosen an optimal cost allocation. The
explanation tool does not support fair share or push distribution.
Features
Non-deliveries and lack of safety stock can have the following five causes:
• Capacity Constraints
• Time-Based Constraints and Maximum Lot Sizes
• Product Availability
• Lead Time
• Costs
The explanation tool displays these causes, but does not explain why the optimizer fulfills
the demand of one product but not of another when there is a lack of capacity.
Capacity Constraints
In the SNP or deployment optimizer profile, you have defined that the optimizer is to
consider certain capacity constraints. The optimizer considers the resource capacity
defined in the resource master data.
A possible cause for non-deliveries is that the system cannot fulfill the demand with
the available resource capacity.
The system shows you the following data of the capacity problem:
• Resource with the capacity problem.

• Number of the period (bucket) where the capacity problem occurs.
• Missing capacity of the resource.
If your planning buckets profile also includes daily periods, the system cannot determine any
capacity problems caused by calendar problems within the time frame covered by daily
periods. For example, the system cannot suggest capacity could be made up by working on
a holiday.
Time-Based Constraints and Maximum Lot Sizes
In interactive SNP planning, you have defined time-based constraints (upper limits)
for the capacity of specific sources of supply (such as for production or
transportation). For more information, see Definition of Time-Based Constraints in
Interactive Planning. In the SNP or deployment optimizer profile, you have also or
alternatively defined that the optimizer is to consider maximum lot sizes.
The system displays the following data:
• Name of the source of supply for which you have set the upper limit or maximum lot size.
• Name of the product for which you have set the upper limit or maximum lot size.
• Procurement type of the location product (in-house production, external procurement, and so on).
• Number of the period where the capacity problem occurs.
• Quantity by which you must raise the upper limit to solve the problem. In the case of the production
upper limit, the system does not show the quantity but rather the number of executions of the
production model (PPM) or production data structure (PDS). An execution of the PPM or PDS
corresponds to the output quantity you specified in the PPM/PDS.
Product Availability
A possible cause for non-delivery can be that products are not available because a
source of supply does not exist (for example, because the bill of material has not
been completely defined).
The system shows you the following data of the product availability:
• Name of the product and location

• Number of the period in which the product quantity is missing
• Missing quantity of the product
The system does not check the validity of PPMs/PDSs or transportation lanes. It also does
not check the validity of time-dependent parameters of PPMs/PDS (such as material
consumption).
If you have defined a PPM/PDS that is not valid until the middle of the planning horizon, for
example, the system does not determine any availability problems in the first half of the
planning horizon.
Lead Time
Due to a long duration of shipment and production, the lead time it takes for a
product to be available in a specific period can stretch over several periods. The
system therefore frequently cannot fulfill demands because the lead time stretches
into the production or stock transfer horizon, or the planned delivery time. The lead
time can even stretch back into the past (before the planning period).
The system shows you the following data of the lead time:
• Name of the product and location

• Name of the source of supply
• Procurement type of the location product
If the lead time stretches into the past, the procurement type is S (initial stock
level).
• Missing quantity of the product
• Start and finish time of the order
• Number of days by which the corresponding horizon (production or stock transfer horizon) or the
planned delivery time has been violated.
Costs
The fulfillment of the demand and the safety stock requirement is called a soft
constraint for the SNP or deployment optimizer. That means there are penalty costs
for not fulfilling the demand. If you have set the penalty costs for non-delivery and
safety stock shortfall too low in the location product master data, the optimizer may
decide not to fulfill the demand. This may be the case if the total costs are lower
when demand is not fulfilled.
The system displays this possible cause in a message.
If you have not defined penalty costs for safety stock shortfall, the optimizer cannot
determine the cause. If you run a model consistency check, you will, however, see a
corresponding message.
Order Suggestions
The system suggests additional orders that you could use to remedy the missing
quantities.
If you use the suggested orders or try to solve the exceptional situations another way
depending on the displayed causes, a new optimization run can however still lead to similar
or different problems due to the dependencies.
For example, if you increase the capacity of a resource to remedy the missing quantities of a
specific product, the system can use the additional capacity to cover the missing quantities
of another product with higher priority.
Further Information
The explanation tool only generates one possible explanation for each exceptional
situation. However, there may be other explanations as well. For example, if the
system finds a capacity bottle-neck for a resource and suggests increasing the
capacity of this resource, another solution might be to increase the capacity of an
alternative resource.
If the results of the explanation tool are incorrect, this might be because the
optimization solution on which they are based was not optimal (for example, due to
runtime restrictions).
Activities
To execute the explanation tool, from the SAP Easy Access screen, choose Advanced
Planning and Optimization ® Supply Network Planning ® Reporting ® Optimizer Log Data.
Then select an optimization run and choose Explain. The Explanations of the SNP
Optimization Results screen appears. Here you make settings such as the target and
level of detail of the explanation, and choose Execute. For more information, see
Configuration of the Explanation Tool.
After you have executed the explanation run, you see the Optimization Run X screen
that displays the logs for the selected optimization run. The tree structure contains
the entry Explanations with the subentries Configuration and Explanation Results. If you
double-click on these entries, you see your entry data and/or the results of the
explanation run on tab pages on the right side of the screen. If the upper table on
the right side of the screen contains several entries, you can double-click on an
entry in the lower table to see its detailed data.
You can also execute the explanation tool from the Optimization Run X screen by
choosing Explain.
If you want to execute the explanation tool in the background, choose Advanced
Planning and Optimization ® Supply Network Planning ® Reporting ® Explanation of
Optimization Results.
Configuration of the Explanation Tool

Purpose
You can configure the explanation tool for an optimization log in Supply Network
Planning (SNP) according to your requirements. This means you can choose which
exceptional situations you want explained and how detailed you want the
explanation to be. This affects, for example, the complexity of the calculation and
thus the runtime as well.
Process
...
1. Selection of the Optimization Run

You can select a specific optimization run directly or you can specify which run of
a specific user is to be explained (going backward: the fourth to last run is run
no. 4, for example).
2. Target of the Explanation
You can specify whether you want an explanation for the causes for non-delivery
only, or for the causes for safety stock shortfall only, or both. In addition, you
can specify the priority classes of the demand for which you want the system to
determine these causes (demand forecast, customer demand, and so on).
You also have to show the system how your model is structured. By doing so,
you are giving the system information about the sequence in which it is to check
the possible causes for an exceptional situation. Depending on whether your
model is based on control costs or actual costs or whether it is in the structure
phase, other causes for the exceptional situation could be possible. Since the
causes are dependent on one another, the check sequence of these causes is
crucial for the analysis.
The following table shows the sequence of the analysis depending on the model:
Model based on control Model based on business Model in the structure phase
costs (actual) costs (master data is in the structure
(such as high non-delivery (such as prices as costs for phase and might not yet be
costs with the goal of non-delivery) complete)
maximizing the service level)
Costs Time-based constraints and Costs
Time-based constraints and maximum lot sizes Product availability
maximum lot sizes Capacity restrictions Time-based constraints and
Capacity restrictions Horizons maximum lot sizes
Horizons (such as production Costs Capacity restrictions
horizon) Product availability Horizons
Product availability Planning horizon Planning horizon
Planning horizon
In the explanation results, the analysis phase displayed is the one in which the
system has determined the cause.
You have defined high penalty costs for non-delivery in the location product master data to
ensure that the system covers as many demands as possible. Since your model is therefore
based on control costs, you set this as the target of the explanation.
However, the explanation tool ascertains that a demand was not covered. A probable cause
is that you have not set the penalty costs for non-delivery high enough to prevent non-
deliveries. According to your setting, the system first checks whether or not the penalty costs
are the cause for the non-delivery. If so, the system does not have to check for any other
causes (such as lack of capacity).
3. Object Selection
In many cases, explanations are only useful and necessary for a subgroup of the
location products in an optimization run. For example, you can choose to see the
explanations only for the non-deliveries for the most important products and/or
customer locations.
You can select the location products with a selection you have created in
interactive SNP planning or you can enter them directly.
4. Level of Detail of the Explanation
You can specify how detailed you want the system’s explanations to be. For
example, the most detailed explanation would explain the non-delivery for each
location product, period, and priority class. The least detailed explanation level
would explain the non-delivery for all location products in the entire explanation
horizon.
You can specify the following parameters:
•  Level of detail: You specify how detailed you want the explanations to
be. The options available are:
•  Aggregated explanations for all selected location products
•  Aggregated explanations for all products in a location
•  Aggregated explanations for a product in all locations
•  Explanations for each location product
You have defined that you want the system to generate aggregated explanations for all
selected location products. You see the explanation that a total of 8 hours of production
capacity are missing for all selected location products.
In this case, you cannot tell how much production capacity is necessary to remedy the
missing quantity of a specific location product. To see this information, you must specify that
you want the system to generate explanations for each location product.
•  Explanation horizon: You can enter a time frame for which you want
the system to generate explanations.
•  Explanation for each period/priority class: You can specify whether

you want the system to generate the explanation for each period and each
priority class, or for the entire explanation horizon and not separately
according to priority classes.
•  Discrete restrictions: You can specify whether or not you want the
system to consider the discrete restrictions defined in the SNP optimizer
profile or deployment optimizer profile when it runs a cause analysis.
•  Runtime: You can restrict the runtime of the explanation tool. If you have
defined that the system also considers discrete restrictions (see above), we
recommend that you restrict the runtime.
Optimization Run Termination

Use
You can use this function to terminate optimization runs in a ‘gentle’ fashion,
without interrupting current processes. It is particularly suited to runs that were
started interactively but can also be used for background runs. If you start an
optimization run interactively, you might want to use this function in the following
circumstances:
• If you discover that you have defined a runtime that is too long and would like to perform a new
optimizer run with a shorter runtime.
• If you can conclude from the messages or graphics displayed during the optimization run that the
system has already found a solution but the optimizer continues the run, trying to improve on this
solution, and you want to accept the solution that has already been found and terminate the run.
Prerequisites
You can only terminate optimization runs that you have started yourself. To
terminate runs started by other users, you need system administrator authorization
(authorization object S_RZL_ADM that must include authorization field ACTVT –
activity).
Features
1.• If you terminate an optimization run, the system brings the run to a proper conclusion, which
means that it saves all the data that has been determined by this point in time and creates a
complete log. Any solutions found by this time are also saved and recorded in the log.
2.• The system makes regular checks to see if the user has terminated the optimization run.
However, it might take some time before the system receives this information and terminates all
the current processes. It is not possible to ‘gently’ terminate the optimization run during its initial
data collection (data reading) period.
If it takes too long to terminate the optimization run with this function, you can
also terminate the run immediately. If you do this, the system does not save any
data from the current run and also terminates log creation immediately, which
means that the log generated might be incomplete. You need system
administrator authorization to perform this abrupt optimization run termination
(see the Prerequisites).
Activities
Terminating an Optimization Run Gently
...
1. Follow this SAP APO Easy Access menu path: APO Administration ® Optimization ® System
Monitoring ® Terminate Optimization Runs.
2. Select the optimization run you wish to terminate and choose with the quick info, Finish
Optimization Run.
3. The system completes the data collection period if necessary, saves the data, and generates a
complete log.
Terminating an Optimization Run Abruptly

...
1. Follow this SAP APO Easy Access menu path: APO Administration ® Optimization ® System
Monitoring ® Process Overview.
2. Choose with quick info, Display Optimizer Processes.
3. Select the optimization run you wish to terminate and choose Finish Process.
4. The system terminates the optimization run and log generation immediately. It does not save
any data.

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OPTIMIZATION

Supply Network Planning Run

Comparison of the Planning Methods

Application Examples for the SNP Optimizer

Finite Capacity Planning

Source Determination (Optimizer)

Consideration of Incoming Quota Arrangements

Lot Size Planning

Running the Optimizer from the Interactive Planning Desktop

Definition of Time-Based Constraints in Interactive Planning

Running the Optimizer in the Background

Automatic Cost Generation

Definition of the Business Goals

Prioritization of Customer Demands and Demands with High Volume

Penalty Cost Group Profile

Sequence-Dependent Lot-Size Planning

Cross-Period Lot Size Planning

Optimization Input Log

Resulting Costs of Optimization

Explanation of the Optimization Results

Configuration of the Explanation Tool

Optimization Run Termination

Supply Network Planning Run

Heuristic and Capacity

• Capacity leveling: This is

a step following on from

Constraints and Business Scenarios

Heuristic and Capacity

Heuristic and Capacity

that are entered

• Production, procurement, storage, and transportation costs

The optimizer makes sourcing decisions within optimization-based planning. This

• Primal simplex method

• Discrete (integer-value) lot sizes for transportation or PPMs/PDSs

• • Convex functions of labor cost per day, assuming eight normal

In contrast, concave piecewise linear cost functions cannot be solved by an LP

Aggregated Planning - Vertical

1. You run the optimizer.

Factors Considered During the Run

Running the Optimizer from the Interactive Planning Desktop

Running the Optimizer in the Background

Cross-Period Lot Size Planning

Comparison of the Planning Methods

Application Examples for the SNP Optimizer

Application Examples for the SNP Optimizer

1. • Finite Capacity Planning

1.• Planning Area Administration

Features of Finite Capacity Planning

26. • Optimization-Based Planning

Source Determination (Optimizer)

• Set Up of Planning Area

Using Costs to Control Source Determination

• Using Production Costs to Prioritize Production Resources

System Action if Source Cannot Be Found

Production Data Structure in SNP

Consideration of Incoming Quota Arrangements

Quota Arrangements for Products and Product Groups

Incomplete Quota Arrangements

Penalty Costs for Quota Arrangement Violations

Creating and Changing Quota Arrangements

Lot Size Planning

● Planning Area Administration

Lot Size Planning for Production