posts Lot-Sizing Procedures: Overview MRP

It is material requirements planning's role to generate an order proposal if a requirements shortage is determined during a planning run. The lot size for the order proposal is specified according to the lot-sizing procedure you entered in the material master record.

The SAP System supports the most up-to-date lot-sizing procedures. User-specific formulae can always be integrated with relatively little effort. The available lot-sizing procedures are divided into three groups:

• Static lot-sizing procedures

In static lot-sizing procedures, the lot size is calculated by means of the quantity specifications recorded in the material master record. There are three different criteria according to which the lot size can be calculated:

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Lot-for-Lot Order Quantity
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Fixed Lot Size
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Replenishment up to Maximum Stock Level

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Period Lot-Sizing Procedures

In period lot-sizing procedures, the requirement quantities from one or from several periods are grouped together to form a lot. The SAP System supports various periods. You can determine the number of periods which are to be grouped together into an order proposal. You have the choice between:

• daily lot size
• weekly lot size
• monthy lot size
• lot size according to flexible period lengths, depending on accounting periods (period lot size)

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Optimum Lot-Sizing Procedures

In optimum lot-sizing procedures, the requirement quantities for several periods are grouped together to form a lot, whereby an optimum cost ratio is determined between lot size independent costs and storage costs. The only differences between the various optimization procedures are the cost criteria. The following procedures exist:

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Part Period Procedure
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Least Unit Cost Procedure
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Dynamic Lot Size Creation
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Groff Reorder Procedure

The lot-sizing procedure that the system should use for calculating the lot size depends on the requirements planning procedure that has been chosen. If you selected the manual reorder point planning procedure, then you are limited to lot-sizing formulae from the static procedure. If you selected the automatic reorder point planning procedure or MRP, then you can select procedures from each of the three categories. In time-phased planning, you can use either the lot-for-lot order quantity or one of the optimum lot-sizing procedures.

You can influence the grouping of requirement quantities into lot sizes by using additional restrictions in the material master record:

• On the one hand by entering limit values (minimum and maximum lot sizes). These limit values will then be taken into account during the lot-size calculation. In other words, the lot size will either be rounded up to the minimum quantity or the system will avoid grouping together requirement quantities that exceed the maximum lot size.

On the other hand by entering a rounding value. This value enables you to specify that during the lot-size calculation, the resulting lot is to cover a multiple of the order unit (for example, if the lot is to be adjusted to full packaging units, then the order unit is rounded accordingly).