Inventory Policy: Settings & Optimization

Inventory Policy: Settings & Optimization

This article is part of the Inventory Policy series, split from the original Inventory Policy article.

Bulk Updates and Policy Assignment Rules

Opening the Inventory Policy Drawer

From the Inventory Policy grid, click Settings to open the Inventory Policy drawer. The drawer has three tabs: Update, General Settings, and Reset.




Update Tab

Bulk Policy Changes

Use this tab to apply a policy to a group of item-locations in one operation, instead of editing each record individually. You can filter by any configured attribute, the same set available throughout the Settings drawer, not just a fixed pair of dimensions.
  1. Click + Add under Select items and build a filter for the item-locations you want to update.
  2. Under Apply to, choose whether the change should go to Suggested Policy or Overridden Policy.
  3. Choose a Policy from the dropdown.
  4. Click Update.




Suggested Policy is the policy the system would normally recommend or calculate for an item-location. Overridden Policy is a manual decision that takes precedence over the suggested one.

This distinction matters because of how the two fields behave over time. A one-time update to Suggested Policy is not permanent. If Policy Assignment Rules are set to run during calculation (see below), and a rule later matches that same item-location, the rule's policy will replace your manual change. An update to Overridden Policy does not have this risk. Policy Assignment Rules can never set the override, only the suggested policy, so a manual override survives future calculations regardless of what rules are in place.

Example: a planner runs a one-time Update to set Suggested Policy to MTS95 for a specific product line ahead of a known event. If a broader Policy Assignment Rule also matches that same product line and runs during the next scheduled calculation, the manual change is overwritten and the rule's policy takes over. If that same change had been made to Overridden Policy instead, it would still be in place after the calculation runs.

If a change needs to persist regardless of future calculations, use Overridden Policy, not a one-time update to Suggested Policy.

Policy Assignment Rules

Below the one-time Update action, the same tab includes Policy Assignment Rules. A rule lets a planner say "any stock matching this gets this policy," instead of setting policies one row at a time. A rule is made up of a name, a set of conditions, and one policy.






Order matters. Rules run top to bottom, and the last matching rule wins. Put broad rules first and narrow exceptions last, so a more specific rule can still take effect for the items it applies to, even after a broader rule already matched them. Rules can be dragged to reorder.

Example: a broad rule sets all Chemical items to MTS95. A second, narrower rule below it sets all Chemical items with a Sales Split of C to MTS60. A C-tier chemical item matches both rules, but because the narrower rule is listed second, it wins, and that item ends up on MTS60 while the rest of the Chemical items stay on MTS95.

Rules set the Suggested Policy only. They never touch a manual override. This is the most common point of confusion, and it's a deliberate protection: since rules can re-run on every calculation, allowing them to touch Override would risk silently discarding a planner's manual decision every time the schedule runs.

Segmentation lives inside rules, not in a separate grid. Sales Split and Variability Split are just conditions you can use when building a rule's filter. There is no separate segmentation screen for this.

Save Rules vs. Apply Now. Save Rules stores the rule set and its order without changing anything in the grid yet. Apply Now pushes the rules to matching stocks immediately, and works whether or not automatic application during calculation is turned on.

When nothing matches. If no rule applies to a given stock, the system falls back to that stock's last saved policy, and if there isn't one, to the default Finished Product or Non-Finished Product policy.

Rule limits. Rule names can only use letters, numbers, spaces, and underscores, must be unique, and are capped at 250 characters. An empty rule (no conditions) is rejected, since it would otherwise match every stock. If a rule points to a policy that gets deleted, that rule is skipped, and any stocks it would have affected simply keep their existing policy rather than being reset.

Rules are only applied automatically during calculation if Apply Policy Assignment Rules During Calculation is checked on the General Settings tab.


General Settings Tab

This tab holds settings that affect the ongoing Safety Stock and Reorder Quantity calculation, including:
  1. Calculate Safety Stock with Shelf Life Data
  2. Calculate Safety Stock for Intermediate Items
  3. Calculate Safety Stock for Raw Items
  4. Calculate With Production History
  5. Calculate Reorder Frequency By Location
  6. Reorder Frequency (Daily, Every Week, Every Two Weeks, Every Three Weeks, Every Month)
  7. Apply Policy Assignment Rules During Calculation
  8. Multi Echelon Inventory Optimization





Multi-Echelon Inventory Optimization (MEIO)

MEIO is found under Inventory Policy > Settings > General Settings > Optimization.

Instead of calculating safety stock for each item-location on its own, MEIO looks at the whole product structure together, raw materials, intermediates, and finished goods, and figures out the best place to hold safety stock across that chain, within a spending limit you set.

Budget is the total amount you're willing to tie up in safety stock across all the linked items, in your chosen currency. The optimizer spreads this budget across the chain to get the best service level it can within that limit.

Holding Rate is the cost of holding inventory, expressed as a percentage (for example, 18%). It's used to estimate how expensive it is to hold stock of each item, which factors into how the budget gets divided across the chain.

Example: a finished product depends on a component held at an upstream plant. Rather than setting a safety stock target for the finished product and the component independently, MEIO considers both together and decides how much of the available budget should sit at each point in that chain to get the best overall service level for the money.

A location can show non-zero safety stock even with no demand of its own. Demand Down Lead Time (DDLT) for a plant is not based only on the plant's own demand. Even if a plant's own demand is zero, its DDLT still accounts for the combined demand from the distribution centers it supplies, multiplied by the plant's own lead time. This is expected behavior, not an error, a plant with zero demand can still need safety stock to support the DCs downstream of it.














Reset Tab

Use this tab to revert item-locations back to their suggested policy, whether that's a single item-location, a manual selection of several, or a full filtered set, in one action.

  1. Click + Add under Select items and choose the item-locations to reset.
  2. Click Reset.




Resetting clears the Overridden Policy field for the selected item-locations. It does not change Suggested Policy. Once the override is cleared, the calculation falls through to whatever Suggested Policy already is for that item-location.

Because a reset on multiple item-locations cannot be undone, confirm your selection carefully before clicking Reset.




Decimal Places

Some key things to know when using Decimal Places to change how the values display in the grid:
  1. Average Daily Demand is calculated using total historical demand รท 365 days.
  2. For low-demand SKUs, the calculated values may be very small and therefore require decimal precision for accurate visibility.
  3. The Inventory Policy grid supports displaying decimal values for Average Daily Demand and/or respects the Decimal Places setting configured from the toolbar.





Inventory Policy series