How are System Class Codes are assigned?

• Classification set by the system to categorize the Item/SKU based on certain attributes
• System classes are also used for reporting purposes
  1. 'R' Regular System Class Code are Items/SKUs that do not meet the criteria for any other system class code
  2. 'S' Slow System Class Code are Items/SKUs that have an annual demand that is below the Slow Mover Limit setting in Company Control Factors
  3. 'L' Lumpy System Class Code are Items/SKUs taht have a MADP that is greater than the Lumpy Demand Limit setting in Company Control Factors
  4. 'N' New System Class Code are Item/SKUs that have been on the system for less than six months
  5. 'U' Uninitialized System Class Code are Items/SKUs that are new to the system and require a starting forecast before the system generates an SOQ
  6. 'A' Alternate System Class Code are Item/SKUs that have been calculated using Alternate Forecasting. The user initiates the Alternate Forecasting function. The alternate forecast is based on the service goal and up to one year's worth of history
     • The system performs the following actions
     • Disables the MADP (and displays the MADP on the Demand Forecasting tab as 99.9)
     • Increases safety stock to handle spikes
     • Calculates the necessary IOP and OUTL to achieve the service goal
     • The following considerations are important for Alternate Forecast:
     • Increase the service level goal and evaluate the results before you consider using the Alternate Forecast option
     • Consult with your project manager and your E3 consultant before using Alternate Forecast
     • Use the Alternate Forecast option only for highly erratic Items/SKUs when you must satisfy the service objective for a demand spike
     • Do not use Alternate Forecast for seasonal items with predictable selling patterns
     • Use Alternate Forecast on an exception basis only because it could increase your safety stock investment dramatically
• Note: Seasonal profiles are not used for Alternate Forecast
• If an item has a seasonal profile, it is removed from the Alternate Forecast application

Additional information regarding System Class Codes and the priority in which they are assigned:

• Regular (R)
• Slow (S)
• Lumpy (L) overrides Slow (S)