1. Can you think of factors that might affect production, procurement, storage or transportation costs as referred to above?
2. Given the apparently large number of factors taken into account by the optimizer in SNP, do you think the business and/or the system can run the optimizer programme frequently?

SAP, the global leader in enterprise resource plan-ning (ERP) systems, offers several tools to help a business find an optimal solution to scheduling and planning problems. The advanced planner and optimizer (APO) offers solutions to help firms find the best and most cost-effective solution in areas like demand planning, production planning, transportation planning and supply network planning.
The later module, supply network planning (SNP) allows planners to determine optimal production plans, distribution plans and purchasing plans.
According to SAP’s documentation, the SNP module offer an optimizer that will obtain the most cost-effective solution based on the following criteria:
● Production, procurement, storage and transportation costs;
● Costs for increasing the production capacity, storage capacity, transportation capacity and handling capacity;
● Costs for violating (falling below) the safety stock level;
● Costs for late delivery;
● Stock-out costs.
The optimizer uses linear programming method to take account of all planning factors simultaneously. According to SAP’s documentation, as more constraints are activated, the optimization problem becomes more complex and takes more time to complete. The SNP module offers several variants on linear programming to allow maximum applicability to varying problem scenarios.