What is optimization horizon in SAP SCM-IBP-INV - Inventory?

SAP Term: optimization horizon

• Component: SCM-IBP-INV

• Component Name: Inventory

• Description: The number of weeks within a planning horizon where time-varying data, such as demand forecast, is used for computation by the inventory optimization operator. The inventory optimization operator produces a time-series-based plan for the entire planning horizon for example, 52 weeks based on data from the optimization horizon for example, the 26 weeks starting from the current date.

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• Key Concepts: 
  Optimization horizon is a term used in SAP's Inventory Optimization component of the Supply Chain Management (SCM) suite. It is the time period for which the inventory optimization process will be run. This time period can be set to any length, from a few days to several months. The optimization horizon is used to determine the optimal inventory levels for a given time period. 
  
  How to use it: 
  In order to use the optimization horizon, you must first set up the parameters for the optimization process. This includes setting the length of the optimization horizon, as well as other parameters such as safety stock levels and demand forecasts. Once these parameters are set, the optimization process can be run and the optimal inventory levels for the given time period will be determined. 
  
  Tips & Tricks: 
  When setting up the optimization horizon, it is important to consider both short-term and long-term needs. For example, if you are looking to optimize inventory levels for a month-long period, you may want to set a shorter optimization horizon of a few days in order to capture any short-term fluctuations in demand. 
  
  Related Information: 
  For more information on SAP's Inventory Optimization component, please refer to SAP's official documentation here: https://help.sap.com/viewer/product/SCM_IBP_INV/latest/en-US