Page 1 of 4 MM-1-010-Lot Size Calculation.

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Lot Size Calculation

MRP (or MPS) determines how much stock is needed to satisfy demand in the net requirements calculation. This shortage quantity must now be covered by one or more receipts. The system calculates the receipt quantity in the lot size calculation. You specify how the system is to determine the lot size by selecting one of the lot-sizing procedures in the MRP view of the item's material master record. You also may specify additional restrictions on the lot size in the MRP view. The minimum lot size, for example, is applied after the lot size has been calculated and insures the order quantity is at least that amount. The maximum lot size ensures that the order quantity does not exceed that amount. The rounding value modifies the order quantity so it is in multiples of the amount.

Ahmad Rizki

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In static lot-sizing procedures, the system does not take future shortages into account; that is, if it determines shortages, the system creates an order proposal for the quantity of the static lot size. If you have specified that the exact lot size (lot-for-lot order quantity) is to be used, the system uses the exact shortage quantity as the order quantity in the case of a material shortfall. If there are several goods issues leading to a material shortfall in one day, the system groups the shortage quantity from this day in one order proposal, rather than creating an order proposal for each shortage. If you have specified that the fixed order quantity is to be used, the system uses the fixed lot size quantity as the order quantity in the case of a material shortfall. If this order quantity is not sufficient to cover the shortage, the system generates several order proposals for the same date until the shortage has been covered. If you have specified that the order quantity replenishment up to maximum stock level is to be used, the system creates an order proposal for the quantity that is required to reach the maximum stock level defined in the material master record.

Ahmad Rizki

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In period lot-sizing procedures, the system groups several requirements within a time interval together to form a lot. The period lengths can be either days, weeks, months or a period of flexible length equal to posting periods as well as freely definable periods according to a planning calendar. Daily lot size: All requirement quantities that fall within a day or within a specific number of days (which you have determined) are grouped together to form a lot. Weekly lot size: All requirement quantities that fall within a week or within a specific number of weeks (which you have determined) are grouped together to form a lot. Monthly lot size: All requirement quantities that fall within a month or within a specific number of months (which you have determined) are grouped together to form a lot. Lot size according to flexible period length: All requirement quantities that fall within one flexible period length or within a specific number of flexible period lengths (which you have determined) are grouped together to form a lot. You determine the period lengths according to the accounting periods. This lot size is also called period lot size.

Optimum lot-sizing procedures attempt to optimize the total costs resulting from order and storage costs. You enter the ordering costs in the material master (MRP 1) or, if necessary, in the MRP area segment. The system determines the storage costs using the storage costs indicator, which you define in the Customizing IMG activity "Check lot-sizing procedure" by entering a storage cost interest rate. You assign the storage costs indicator to the material master (if necessary, per MRP area). The formula for calculating storage costs is then: Storage costs = Requirement x Price x Storage cost interest rate x Time in storage / 100 / 365. On the basis of various costing criteria, current and future requirements are grouped together into a lot in such a way as to optimize the total costs.

Ahmad Rizki

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You can influence the grouping of requirements to form a lot by entering additional restrictions in the material master record. For example, you can define limiting values (minimum lot size, maximum lot size). During lot-size calculation, the system takes into account these limiting values. That is, the lot size is either rounded up to the minimum lot size, or the system prevents the grouping of requirements to form more than the maximum lot size.

Ahmad Rizki