If you choose the automatic reorder point planning procedure then both the reorder level and the safety stock level are determined by the integrated forecasting program.
The system determines the forecast values for future requirements by means of historical data. From these forecast values, the system then calculates the reorder level and the safety stock level, taking the service level, which is specified by the MRP controller, and the material's replenishment lead time into account. The system then records these two values in the appropriate material master record.
Since the forecast is carried out at regular intervals, the reorder level and the safety stock level are continually adapted to the current consumption and delivery situation. This means that a contribution is made towards keeping stock levels low.
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