What is optimization-based planning in SAP SCM-APO-SNP - Supply Network Planning (SNP)?

SAP Term: optimization-based planning

• Component: SCM-APO-SNP

• Component Name: Supply Network Planning (SNP)

• Description: Type of planning using the SNP optimizer. Cost is the crucial aspect of this type of planning costs for procurement, production, storage, and transportation, for example. The SNP optimizer searches through all "feasible" plans in an attempt to find the most cost-efficient in terms the total costs.

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• Key Concepts: 
  Optimization-based planning is a component of SAP Supply Network Planning (SNP) that uses mathematical algorithms to optimize the supply chain. It takes into account various factors such as demand, supply, inventory, and transportation costs to determine the most efficient and cost-effective way to plan and execute the supply chain. 
  
  How to use it: 
  Optimization-based planning can be used to create a plan that meets customer demand while minimizing costs. It can also be used to identify potential problems in the supply chain and suggest solutions. The user can set parameters such as inventory levels, transportation costs, and production times to determine the optimal plan. 
  
  Tips & Tricks: 
  When using optimization-based planning, it is important to consider all factors that may affect the supply chain. This includes customer demand, supplier availability, inventory levels, transportation costs, and production times. Additionally, it is important to regularly review the plan and adjust parameters as needed. 
  
  Related Information: 
  Optimization-based planning is just one component of SAP Supply Network Planning (SNP). Other components include demand planning, supply network design, and global available-to-promise (GATP). Additionally, optimization-based planning can be used in conjunction with other SAP modules such as Materials Management (MM) and Production Planning (PP).