What is tolerance lane in SAP SCM-IBP-DM - Demand?

SAP Term: tolerance lane

• Component: SCM-IBP-DM

• Component Name: Demand

• Description: The range of historical values that are considered regular by the outlier correction algorithm during the preprocessing steps of forecasting. Depending on the selected outlier detection method, the algorithm calculates the tolerance lane by multiplying the standard deviation or the difference between the third and first quartiles of the data with a predefined constant number. If a historical value is outside the tolerance lane because it is unusually high or low, the algorithm deems it to be an outlier and corrects it using the selected outlier correction method.

Smart SAP Assistant

• Key Concepts: 
  Tolerance lane is a feature in SAP's Demand Planning component of the Supply Chain Management - Integrated Business Planning (SCM-IBP) suite. It allows users to define a range of acceptable values for a given demand plan. This range is referred to as the “tolerance lane” and can be used to identify potential issues with the plan before it is implemented. 
  
  How to use it: 
  To use the tolerance lane feature, users must first define the range of acceptable values for their demand plan. This can be done by setting upper and lower limits for each item in the plan. Once these limits are set, the system will automatically flag any values that fall outside of the defined range. This allows users to quickly identify potential issues with their plan before it is implemented. 
  
  Tips & Tricks: 
  When setting up the tolerance lane, it is important to consider both the upper and lower limits of the range. Setting too wide of a range may result in too many false positives, while setting too narrow of a range may result in missing potential issues. It is also important to consider how often the tolerance lane should be updated, as changes in demand patterns may require adjustments to the range. 
  
  Related Information: 
  For more information on using the tolerance lane feature in SAP's Demand Planning component, please refer to the official documentation available on SAP's website. Additionally, there are several online tutorials and videos available that provide step-by-step instructions on how to set up and use this feature.