What’s New in SAS Inventory Optimization 2.1

Overview

In SAS Inventory Optimization 2.1, the MIRP procedure provides more features and greater functionality than it did in SAS Inventory Optimization 1.3. There is no change in the IRP procedure. SAS Inventory Policy Studio, which was part of the previous release, is no longer available due to changes in the Analytical Platform.

Changes to the MIRP Procedure

The following functionality is added in the new release of the MIRP procedure:

Service-level optimization for internal locations in a network. The internal locations are locations that support other locations within the same network. They do not face customer demand directly. The MIRP procedure optimizes service levels at internal locations subject to service-level constraints at customer-facing locations.
Service-level evaluation for internal locations in a network. The MIRP procedure evaluates total network costs for a given set of service-level constraints at all locations.
Policy optimization for all locations given their service-level targets. The procedure calculates optimal reorder and order-up-to levels for all locations.

In the previous version, service-level optimization and policy optimization were done in a single call. Since service-level optimization is normally conducted much less frequently than policy optimization, it is better to separate them from each other.
Order generation for all locations in a network. The procedure uses marginal analysis to determine optimal inventory allocation when a location does not have enough inventory to meet replenishment requirements from its downstream locations.
Prediction of key performance indicators (KPIs). The procedure estimates KPIs based on the specified reorder and order-up-to levels.

In the previous version, KPI prediction was part of the optimization and evaluation. It is quite common in practice that reorder and order-up-to levels are optimized once a week, but KPIs need to be reviewed on a daily basis. With KPI prediction being a separate functionality, the MIRP procedure provides more flexibility to support inventory replenishment planning.
Since the new release separates service-level optimization and KPI prediction from the policy optimization, the performance of the MIRP procedure has greatly improved.