What is buffer in SAP SCM-IBP-DDP - IBP Demand Driven Planning?

SAP Term: buffer

• Component: SCM-IBP-DDP

• Component Name: IBP Demand Driven Planning

• Description: A variable amount of inventory that is sized and maintained with the aim to keep inventory at the optimum stocking levels.

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• Key Concepts: 
  Buffer is a term used in SAP IBP Demand Driven Planning (DDP) to refer to the amount of inventory that is kept in reserve to meet customer demand. It is used to ensure that there is enough inventory available to meet customer orders, while also avoiding overstocking. The buffer can be adjusted based on the customer's needs and the amount of inventory available. 
  
  How to use it: 
  In SAP IBP DDP, the buffer is set up by defining a target inventory level for each item. This target level is then used to calculate the buffer size, which is the difference between the target level and the current inventory level. The buffer size can be adjusted as needed, depending on customer demand and inventory availability. 
  
  Tips & Tricks: 
  When setting up a buffer in SAP IBP DDP, it is important to consider both customer demand and inventory availability. If customer demand is high, it may be necessary to increase the buffer size in order to ensure that there is enough inventory available to meet customer orders. On the other hand, if inventory availability is low, it may be necessary to decrease the buffer size in order to avoid overstocking. 
  
  Related Information: 
  SAP IBP DDP also includes other features such as safety stock and reorder points, which can be used in conjunction with buffers to ensure that there is enough inventory available to meet customer orders. Additionally, SAP IBP DDP includes features such as forecasting and optimization, which can help optimize inventory levels and reduce costs.