I have this purchased item that is also used in bills of materials.
I’m wondering why inventory planning is allowing us to have a negative “projected on hand quantity” when I am asking for a safety stock of 2,200?

I have this purchased item that is also used in bills of materials.
I’m wondering why inventory planning is allowing us to have a negative “projected on hand quantity” when I am asking for a safety stock of 2,200?

Best answer by pranavkhare34
Hi
I believe the Safety stock (in this case, qty. 2,200) does not act as a hard threshold. It acts as a planning trigger that tells the system when to generate replenishment. It does not prevent projected inventory from falling below that level. If forecast and BOM consumption occur before the planned replenishment supply date, the projected balance will temporarily go negative.
You currently have 4,291 units on hand and a Safety Stock of 2,200 units. However, the planning results show multiple forecast demands of -1,800 units each, along with additional requirements because the item is used in a BOM. When those demands are applied sequentially, the projected balance drops quickly below both the safety stock level and eventually below zero, reaching approximately -1,400 units.
So even though the item starts at 4,291 units, repeated consumption of 1,800 units and production requirements reduce inventory faster than supply is scheduled to arrive. The negative projected quantity simply indicates that, based on current timing and quantities, demand exceeds available and incoming supply before replenishment occurs.
Hope this helps
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