Cycle Stock/Inventory Management

How is Cycle Stock handled in AX 2012 R2??

If this is an unknown term, cycle stock for my purposes is the amount of an item’s inventory that will be sold while the same item’s optimal batch quantity is being produced.


Batch quantity = 100

Lead time= 4 days

Daily demand = 20

Cycle stock= 80 because you go through 80 items in the amount of time it takes to produce another batch

So how is Cycle Stock handled in AX 2012? I am having much difficulty finding a solution for this situation.

Any help is much appreciated!!!

That would technically be the safety stock, which is the stock trigger point to cover the lead time usage and the refillment point.

There is a safety stock journal that calculates this on usage based upon history.

I disagree a bit with what you are saying. I agree with what you said safety stock is, however, safety stock does not equal cycle stock.

An easier way to define cycle stock is the amount of inventory you plan to sell in a certain period, while safety stock is the buffer you have in case of increased demand or delays from suppliers. Your on hand inventory would be the sum of safety stock and cycle stock.

From just basic research it seems like cycle stock may be some sort of equivalent of kanban quantities. However, I am not at all familiar with the AX 2012 lean manufacturing capabilities.

I definitely value your opinion, as you have helped me a ton in the past with some other issues. I may even be incorrect now, but I would need more explanation from you as to why I am incorrect.

This is what you said how you view cycle stock:

“cycle stock for my purposes is the amount of an item’s inventory that will be sold while the same item’s optimal batch quantity is being produced”

The trigger point for the items production would be the breaking of what AX references as “safety stock” this level of holding should in theory be 0 as the batch is booked into stock, covering you from an inventory perspective whilst sales commence during the production period.

You are now saying you see cycle stock as

“the amount of inventory you plan to sell in a certain period”

What period? What drives this, it has to be related to a trigger and production due to the cyclical nature.

I am guessing you should re-ask clarifying what you want. A Kanban quantity is really the same as production and safety stock at a simply level, the Kanban quantity is the production amount and the trigger point will be whatever it is (empty bin, auto-replenishment Kanban etc.) but ultimately there is a drive of demand upstream and the Kanban is moving stock to where it is needed in a Just in Time manner.

If I use the ever dependable wiki [:D] it refers to cycle stock as “Cycle stock (Used in batch processes, it is the available inventory, excluding buffer stock)”. So this is in essence a on hand quantity residing in stock when the buffer is removed.

I guess you need to describe what you want and why so we can try to point you in the right direction.

I apologize, you are correct, I am doing a bad job with clarification here.

Based on equations given:

Reorder point= Optimal batch quantity + cycle stock

Cycle stock= Daily demand * number of days to produce optimal batch quantity

I was provided with this information along with the fact that safety stock is separate from cycle stock.

If this still does not make sense, I may have to retire from the topic until a further date in order to gain more clarification myself. Unfortunately, master planning and lean manufacturing in ax 2012 have not bee apart of the original plan, so I am just starting to scratch the surface.

Hi Mike

Not a problem, seems we have a clear definition now, but the news is not good :slight_smile:

The safety stock in AX is ultimately calculated at a base level of daily demand * lead time, which is what the definition of cycle stock is in your example. There are many other elements to this from the safety stock journal but everything else adds in buffer at an arbitrary rate.

You then have in your calculation the reorder point being the optimal batch plus reorder. This means if your optimal batch is 100 and it takes 10 days to make your reorder point is 200, which means when you complete your batch you will still have 100 in stock, or in essence 10 days stock. People and businesses can put whatever metrics in place, but what this metric is doing is hugely overstocking you (accountants hate it, the food industry cannot really do it in many places).

Both Lean and MP will not help you because it does not have this “split”. The safety stock journal does help you if you have the data. You can generate teh new minimum on a factor - it would work out if you use 10 a day for a 10 lead day lead time your safety stock is 100, you can then suggest the new minimum as a factor of 2. However this only works if your lead time calculation is calculated from you optimal batch quantity, if it is not then the theory would not work (and you would need to test it anyway).

I would start by asking why they need double the stock they need for a lean environment - this metric might be being used to cover poor data (dont know the real lead time or real optimal batch size etc.).

Good luck and let us know how you get on.