SAP IBP for inventory: Configuring and Preparing for Use

Creating an Inventory Planning and Optimization Process

The Power of Multi Echelon

Validating Inputs

Running an Inventory Optimization Operator

Analyzing the Results of an Inventory Optimization Run

Finalizing the Inventory Plan

Knowledge quiz

It's time to put what you've learned to the test, get 3 right to pass this unit.

How do carrying costs impact inventory?

Choose the correct answer.

Carrying costs impact inventory in the following ways: Inventory holding cost has both financial and operational components; tax effects should be considered in calculating inventory holding cost; inventory holding cost has a significant impact on inventory optimization; item- and location-specific inventory holding cost can be much higher than the cost of other forms of working capital; and, inventory carrying cost, or inventory holding cost, is the effective interest rate at which inventory costs are carried.

Carrying costs do not impact inventory in the following ways: Inventory holding cost has both financial and operational components; tax effects should be considered in calculating inventory holding cost; inventory holding cost has a significant impact on inventory optimization; item- and location-specific inventory holding cost can be much higher than the cost of other forms of working capital; and, inventory carrying cost, or inventory holding cost, is the effective interest rate at which inventory costs are carried..

How can we calculate the weighted average cost of capital?

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Cost of Equity plus Cost of Debt, where Cost of Equity is equal to the multiplication of the expected return factor by the equity ratio; and the Cost of Debt is the multiplication of the cost debt by the debt ratio by one minus the corporate tax rate.

Cost of Equity plus Cost of Equity again, where Cost of Equity is equal to the multiplication of the expected return factor by the equity ratio; and the Cost of Equity again is the multiplication of the cost debt by the debt ratio by one minus the corporate tax rate.

What can a user do within the step four, "Finalizing the inventory plan", of the inventory planning process?

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The inventory planner or the inventory planning manager can make changes directly in the web browser or via the SAP IBP, add-in for Microsoft Excel, save their changes, and complete the inventory plan..

The inventory planner or the inventory planning manager cannot make the changes directly in the web browser nor via the SAP IBP, add-in for Microsoft Excel.

Which are three categories of inventory carrying costs?

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Non-capital or financial costs; Operations earnings; and, other ramifications.

Capital or financial costs, working capital; Non-capital, or operations costs; and, taxes and other ramifications.