What is actual coverage time?
The actual stocking time is the time until which the available material stock is sufficient to cover the expected material requirements. The first day of the period, the material requirements of which can no longer be covered, is outside the actual supply time.
Calculation of the actual covering time
When calculating the actual replacement time, it is assumed that the demand occurs at the beginning of a planning period. Sufficient stock must be available on the first day of a planning period.
Example: The material requirements for periods 1 to 5 are 200, 200, 300, 500, 400 units. The available inventory at the beginning of the 1st period comprises 1,400 units and is sufficient for 4.5 periods, which is obtained by subtracting the requirement values of the respective periods from the available inventory. The available stock is sufficient for 4 periods, the 5th period can only be used halfway. With a period of 10 days, 45 days of production are covered.
To calculate the actual coverage date, a conversion to the factory calendar takes place. If the start day of the calculation is factory day 360, the stock sufficient for 45 production days is added. Production will last until factory day 405.
The actual stocking time is determined in the context of the need-related replenishment of the material inventory. It is a process of Material inventory planning.