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Simulation Configurations

Configure your supply simulation to match your business rules, safety stock policies, and planning requirements. The simulation engine uses these configurations to determine when and how to generate replenishment recommendations.

Configuration Overview

Supply simulation uses multiple configuration sources that work together:
ConfigurationPurposeImpact on Simulation
Safety StockMinimum inventory levelsTriggers replenishment when projected inventory falls below threshold
Lead TimesTransit and production timesDetermines how far in advance orders must be placed
Replenishment CadenceFixed ordering intervalsControls when replenishment orders can be placed
Fulfillment MappingWhich warehouses serve which channelsDefines where demand is consumed from
Supplier CapabilitiesWhat suppliers can provideDetermines source, MOQ, and capacity for orders
Source TypesPurchase, Production, or TransferDefines how inventory is replenished at each warehouse
Overstock ThresholdMaximum desired inventoryIdentifies excess inventory situations

Replenishment Cadence

What is Replenishment Cadence?

Replenishment cadence defines the fixed intervals at which the simulation can place replenishment orders. Rather than ordering whenever inventory falls below a threshold, cadence-based replenishment aligns orders to a regular schedule.
A SKU-warehouse pairing must have a replenishment cadence configured to be eligible for simulation. Without a cadence, the simulation cannot generate replenishment orders for that pairing.

Cadence Types

CadenceDescriptionOrder Frequency
WeeklyOrders placed on a specific day each weekEvery 7 days
MonthlyOrders placed on a specific day each monthEvery ~30 days
QuarterlyOrders placed on a specific day each quarterEvery ~90 days
Custom (Arbitrary Days)Orders placed every N daysUser-defined interval

How Cadence Affects Simulation

On each day of the simulation, the engine checks whether the current day is a replenishment point based on the configured cadence:
  1. If it is a replenishment day, the engine calculates how much inventory is needed to cover demand until the next replenishment point, accounting for lead time.
  2. If it is not a replenishment day, no new orders are generated for that day (unless safety stock breach detection moves an order earlier — see below).

Replenishment Quantity Calculation

When a replenishment point is reached, the order quantity is calculated as:
  1. Project forward from the order’s expected landing date (order date + lead time) to the next replenishment point.
  2. Sum the forecasted demand over that coverage period.
  3. Add safety stock buffer to ensure inventory stays above the safety stock threshold.
  4. Subtract current projected inventory at the landing date.
  5. Apply MOQ rules — if the calculated quantity is below the supplier’s minimum order quantity, round up to the MOQ.
The simulation always accounts for lead time when calculating quantities. An order placed today won’t arrive until order_date + lead_time, so the engine projects demand from the landing date forward.

Safety Stock Breach Detection

The simulation includes a look-ahead mechanism that can accelerate order dates:
  1. After calculating orders at regular cadence points, the engine scans the projection for days where inventory falls below safety stock.
  2. If a breach is detected before the next scheduled order would land, the engine moves the first order date earlier so that inventory arrives before the breach.
  3. This ensures safety stock is maintained even when demand spikes occur between cadence points.

Configuring Cadence

1

Navigate to Inventory Settings

Go to SettingsInventory Forecast
2

Select SKU-Warehouse Pairing

Choose the SKU and warehouse combination to configure
3

Set Cadence Type

Select the replenishment cadence:
  • Weekly — choose the day of week
  • Monthly — choose the day of month
  • Quarterly — choose the day within the quarter
  • Custom — enter the number of days between orders
4

Save

Apply the cadence configuration

Source Types

What are Source Types?

Source types define how inventory is replenished at each warehouse. Each replenishment order is classified as one of three types:
Source TypeDescriptionSource Entity
PurchaseBuy from an external supplierSupplier
ProductionManufacture in-houseProduction facility / warehouse
TransferMove inventory between warehousesAnother warehouse

How Source Types Map to the Supply Chain

[Suppliers] ──Purchase──→ [Warehouses] ──Transfer──→ [Warehouses]

                         Production
                        (in-house mfg)
  • Purchase orders flow from a supplier to a destination warehouse. The supplier must have a capability configured for the SKU, including lead time, cost, and MOQ.
  • Production orders represent manufacturing at a facility. Production lead time determines how long manufacturing takes.
  • Transfer orders move inventory from one warehouse to another. Transit lead time determines shipping time between locations.

Source Type and Simulation Behavior

The source type affects how the simulation processes each SKU-warehouse pairing:
AspectPurchaseProductionTransfer
Lead Time UsedSupplier lead timeProduction lead timeTransit lead time (warehouse-to-warehouse)
Source EntityExternal supplierSame or linked facilitySource warehouse
MOQ AppliedSupplier MOQProduction batch sizeNone (typically)
DependencyIndependentMay depend on component SKUsDepends on source warehouse inventory
Transfer source types create dependencies between SKU-warehouse pairings. When Warehouse A transfers to Warehouse B, the simulation must process Warehouse A first so that the transfer consumption is accurately reflected. This is handled by the dependency graph (see below).

Units of Measurement

When generating orders, the simulation respects the unit of measurement (UoM) configuration:
  • Each SKU has a default UoM used throughout the system.
  • Suppliers may have a supplier-specific UoM that differs from the default.
  • The simulation converts between UoMs when generating purchase orders, ensuring quantities are expressed in the supplier’s expected unit.

Dependency Graph

What is the Dependency Graph?

The dependency graph determines the order in which SKU-warehouse pairings are simulated. This is critical because some pairings depend on the results of others — particularly when transfers are involved.

Why Order Matters

Consider a simple supply chain:
Supplier → Main Warehouse → Regional Warehouse → Channel
The Regional Warehouse receives inventory via transfer from the Main Warehouse. When the simulation generates a transfer order for the Regional Warehouse, it records consumption against the Main Warehouse’s inventory. If the Main Warehouse were simulated after the Regional Warehouse, this transfer consumption would be missed.

How the Graph is Built

The simulation builds a dependency graph based on:
  1. Fulfillment relationships — which warehouses fulfill which channels.
  2. Transfer routes — which warehouses supply other warehouses.
  3. Bill of Materials (BOM) — which component SKUs are needed to produce finished goods.

Topological Sort

The dependency graph is resolved using a topological sort, which produces a linear ordering where every pairing is processed before any pairing that depends on it:
  1. Source pairings (those with no upstream dependencies) are processed first.
  2. Intermediate pairings (warehouses that both receive and send transfers) are processed next.
  3. Terminal pairings (end-of-chain warehouses fulfilling channels) are processed last.
The simulation includes cycle detection. If the dependency graph contains a cycle (e.g., Warehouse A transfers to B, and B transfers back to A), the simulation reports an error rather than entering an infinite loop.

Example: Multi-Warehouse Dependency

For a supply chain with three warehouses:
PairingSourceDepends On
SKU-001 @ FactoryPurchase from SupplierNone (processed first)
SKU-001 @ Distribution CenterTransfer from FactorySKU-001 @ Factory
SKU-001 @ Regional StoreTransfer from DCSKU-001 @ Distribution Center
The simulation processes these in order: Factory → Distribution Center → Regional Store, ensuring each transfer is reflected in the source warehouse’s inventory.

Safety Stock Configuration

What is Safety Stock?

Safety stock is buffer inventory that protects against:
  • Demand variability (unexpected spikes in orders)
  • Supply delays (late shipments from suppliers)
  • Forecast errors (actual demand exceeding predictions)
The simulation uses safety stock as a threshold. When projected inventory falls below the safety stock level, the simulation generates replenishment recommendations, and may accelerate order dates to prevent a breach.

Setting Safety Stock

Configure at the SKU-warehouse level:
1

Navigate to Inventory Settings

Go to SettingsInventory Forecast
2

Find Safety Stock Section

Locate the safety stock configuration for the desired SKU-warehouse pairing
3

Set Values

Define safety stock using one of the available methods:
  • Fixed quantity — a specific number of units
  • Days of coverage — enough inventory to cover X days of forecasted demand
4

Save

Apply configuration

Safety Stock Methods

MethodDescriptionBest For
Fixed QuantityA specific unit count as the minimum bufferProducts with stable, predictable demand
Days of CoverAutomatically calculated as X days of average forecasted demandProducts with variable demand patterns

How Safety Stock Affects Simulation

During the day-by-day simulation, the engine tracks the safety_stock_qty for each pairing each day. The simulation:
  1. Checks projected EOH (End on Hand) against the safety stock level after processing all consumption and supply events for the day.
  2. Generates alerts when inventory is projected to breach safety stock:
    • Important — inventory is approaching safety stock levels
    • Urgent — inventory is at or below safety stock, stockout is imminent
  3. Accelerates orders — if a safety stock breach is detected before the next cadence-based order would arrive, the simulation moves the order date earlier.

Example Configuration

SKUWarehouseMethodValueEffect
SKU-001MainDays of Cover14 daysSafety stock = 14 × daily avg demand
SKU-002MainFixed500 unitsSafety stock = 500 units always
SKU-003RegionalDays of Cover21 daysHigher buffer for longer lead times

Lead Time Configuration

Types of Lead Times

TypeDescriptionUsed For
Supplier Lead TimeDays from placing a purchase order to receiving goodsPurchase source types
Transit Lead TimeShipping time between warehouse locationsTransfer source types
Production Lead TimeManufacturing time from start to completionProduction source types
Lead times are critical because they determine the landing date of an order: landing_date = order_date + lead_time. The simulation uses landing dates to project when incoming inventory will be available.

Configuring Lead Times

Supplier Lead Times

Set at the supplier capability level:
  1. Go to InventorySuppliers
  2. Select the supplier
  3. View/edit capabilities for each SKU
  4. Set lead time (in days) per SKU

Warehouse Transit Lead Times

Configure transit times between warehouses:
  1. Go to InventoryWarehouses
  2. Access the Lead Times section
  3. Set the matrix of warehouse-to-warehouse transit times
See Lead Times for details.

Lead Time Impact on Ordering

The simulation uses lead times to work backwards from when inventory is needed:
If Lead Time Is…Simulation Effect
Short (1–3 days)Orders can be placed closer to when inventory is needed
Medium (7–14 days)Orders must be placed 1–2 weeks in advance
Long (30+ days)Orders must be placed well in advance; safety stock becomes more critical
For SKUs with long lead times, consider increasing safety stock to provide additional buffer against demand variability during the extended wait period.

Fulfillment Mapping

What is Fulfillment Mapping?

Fulfillment mapping defines which warehouses fulfill demand from which sales channels. This mapping determines where demand consumption occurs in the simulation.
Channel: Shopify US → Fulfilled by: Main Warehouse
Channel: Amazon → Fulfilled by: Amazon FBA
Channel: Wholesale → Fulfilled by: Regional DC

Configuring Fulfillment

1

Go to Inventory Settings

Navigate to SettingsInventory Forecast
2

Find Fulfillment Mapping

Locate the fulfillment configuration section
3

Map Channels to Warehouses

For each channel, select the fulfilling warehouse(s)
4

Save

Apply the mapping

Multiple Fulfillment Options

A channel can be fulfilled by multiple warehouses:
ChannelPrimarySecondary
Website USEast DCWest DC
Website CACanada DCEast DC
Fulfillment mapping is one of the inputs to the dependency graph. The simulation uses these mappings to determine which SKU-warehouse pairings need to be simulated and how demand flows through the system.

Supplier Configuration

Supplier Capabilities

Configure what each supplier can provide:
SettingDescriptionSimulation Impact
SKUsWhich products the supplier providesDetermines eligible suppliers for each SKU
Lead TimeDays from order to receiptSets order-to-landing delay
CostUnit cost per SKUUsed for cost calculations on recommendations
MOQMinimum order quantityOrders are rounded up to meet MOQ
CapacityMaximum order quantityLimits order size per supplier
UoMSupplier-specific unit of measurementOrders are converted to supplier’s UoM

Setting Capabilities

1

Go to Suppliers

Navigate to InventorySuppliers
2

Select Supplier

Choose the supplier to configure
3

Add Capabilities

For each SKU the supplier provides:
  • Set lead time (days)
  • Set unit cost
  • Set MOQ and maximum capacity
  • Configure UoM if different from SKU default
4

Save

Apply configuration

MOQ Handling in Simulation

When the simulation calculates a replenishment quantity, it applies MOQ rules:
  1. If the calculated quantity is below the MOQ, the order is rounded up to the MOQ.
  2. If the calculated quantity is above the MOQ, it is used as-is (no rounding).
  3. The additional units from MOQ rounding contribute to higher projected inventory, which may defer the next order.

Simulation Parameters

Time Horizon

Configure how far into the future to simulate:
SettingTypical ValueUse Case
Short30 daysTactical planning and urgent orders
Medium90 daysStandard replenishment planning
Long180+ daysStrategic planning and long lead time items

Demand Source

The simulation consumes demand based on the selected forecast:
OptionDescription
Selected ModelUses the currently active forecast model
Specific ModelChoose a particular forecast model

Overstock Configuration

What is Overstock?

Overstock threshold defines when inventory is considered excessive. Excess inventory:
  • Ties up working capital
  • Creates risk of obsolescence
  • Increases storage costs

Setting Overstock Thresholds

MethodDescription
Days of CoverFlag as overstock if inventory exceeds X days of demand
Multiple of TargetFlag as overstock if inventory exceeds X times the target level
The simulation tracks the overstock_qty for each SKU-warehouse pairing each day. When projected inventory exceeds the overstock threshold, it is flagged in charts and alerts.

Pairing Eligibility

Requirements for Simulation

Not every SKU-warehouse combination is simulated. A pairing must meet these prerequisites:
RequirementWhy It’s Needed
Replenishment cadence configuredThe simulation needs to know when to check for replenishment
Safety stock configuredDefines the target minimum inventory level
At least one source (supplier capability, transfer route, or production capability)The simulation needs to know where to order from
Demand forecast availableThe simulation needs projected consumption data
If a SKU-warehouse pairing is missing any of these prerequisites, it will be skipped during simulation. Check your configuration if a pairing does not appear in simulation results.

Configuration Best Practices

Begin with higher safety stocks:
  • Learn demand patterns first
  • Understand demand variability
  • Reduce safety stock gradually as you gain confidence
Apply different settings based on product characteristics:
  • Critical items: higher safety stock, shorter cadence
  • Long lead time items: higher safety stock buffer
  • Stable demand items: lower safety stock, longer cadence
  • New products: higher buffer until demand patterns are established
Choose cadence that matches your operational reality:
  • Match supplier ordering windows
  • Align with shipping schedules
  • Consider warehouse receiving capacity
Update configurations as your business changes:
  • New suppliers or changed lead times
  • Demand pattern shifts (seasonal changes)
  • New warehouses or fulfillment routes

Configuration Impact

How Settings Affect Results

ConfigurationSimulation Impact
Higher Safety StockEarlier reorder triggers, more inventory on hand
Longer Lead TimesOrders must be placed further in advance
Shorter CadenceMore frequent, smaller orders
Longer CadenceLess frequent, larger orders
Higher MOQLarger orders, potentially more overstock
More Fulfillment OptionsFlexible sourcing recommendations
Transfer Source TypeCreates dependencies between warehouses

Testing Configuration Changes

Before applying configuration changes:
  1. Run simulation with current settings
  2. Note baseline results (stockout dates, order counts, coverage days)
  3. Change the configuration
  4. Run simulation again
  5. Compare differences and validate the results make sense

Troubleshooting

Pairing Not Appearing in Simulation

Possible causes:
  • Missing replenishment cadence
  • No safety stock configured
  • No supplier capability, transfer route, or production capability set up
  • No demand forecast available for the SKU
Solutions:
  1. Check all pairing eligibility requirements above
  2. Verify the SKU-warehouse pairing has a source configured
  3. Ensure a demand forecast covers the simulation period
Possible causes:
  • Lead times not configured or too short
  • Safety stock too low
  • Missing supplier capabilities
Solutions:
  1. Verify lead time configuration matches real-world delivery times
  2. Review safety stock settings — increase if breaches are frequent
  3. Check supplier setup and ensure capabilities are complete

Too Many Recommendations

Possible causes:
  • Safety stock too high relative to demand
  • Replenishment cadence too short (e.g., daily)
  • MOQ too low, generating many small orders
Solutions:
  1. Review safety stock levels — reduce if inventory is consistently above target
  2. Lengthen the replenishment cadence (e.g., weekly instead of daily)
  3. Check MOQ settings with suppliers

Unexpected Dependency Order

Possible causes:
  • Transfer routes creating unexpected dependencies
  • Circular dependencies between warehouses
Solutions:
  1. Review transfer routes in your warehouse configuration
  2. Check for cycles in the supply chain (e.g., Warehouse A → B → A)
  3. Simplify transfer routes if dependencies are overly complex

Next Steps

Running Simulations

Execute simulations with your configuration

Charts

Visualize simulation results

What-If Scenarios

Test scenarios with different parameters

Lead Times

Configure warehouse lead times