What is it used for?
In Planning Buffers, the Yellow Zone serves as the rebuild zone, guiding replenishment decisions for replenished and replenished override buffers. The top of the Yellow Zone is a key threshold—when the Net Flow Position drops below this level, a replenishment order is triggered to restore stock levels.
In Execution Buffers, when the On-hand Position falls within the Yellow Zone, the part's status should be analyzed. For example, if there are significant incoming demand spikes, expediting an inbound order may be necessary to prevent potential shortages.
How is it obtained?
The Yellow Zone for Planning Buffers is calculated as Average Daily Usage X Decoupled Lead Time (DLT). In Execution Buffers, the Yellow Zone is typically set to 50% of the Planning Buffer's red zone.
Effective replenishment isn't just about avoiding shortages—it’s about maintaining optimal inventory flow. ForgeFlow Cloud ERP ensures that replenishment is triggered when the Net Flow Position falls below the top of the Yellow Zone, keeping inventory levels balanced and demand-driven. With accurate buffer adjustments, you reduce excess stock while ensuring materials are available exactly when needed.
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