Automatic Reorder Point Planning - Example

[Former Member]

Dear All,

Can anyone explain Automatic Reorder Point Planning with an example ?

I want to know how system is calculating the Reorder Point in MRP 1 view automatically when we do a Forecast Run.

I had already gone through few SDN threads on this topic. But the formula which is mentioned in the thread for this calculation is very confusing.

So if someone can explain it with some values/figures i.e for Stock, Replenishment lead time, planned delivery time, past/historical consumption values then it will be very helpful & easy to understand.

Looking forward for your valuable replies.

Thanks & Regards,

[former_member197616 · Accepted solution]

Hi,

Though i did not copile all the data, please refer to the below threads for basic understanding.

http://www.abs.gov.au/websitedbs/d3310114.nsf/4a256353001af3ed4b2562bb00121564/b81ecff00cd36415ca256...

when the consumption keeps changes with time ( past data) it will be hard to find rather a fixed point for a reorder level.So a analysis will be made to find a optimal reorder point using some calculations for futrure reorder point calculation.

Mathematically there are some emperical formulas derived in order to find the trend in the consumption rather the pattern , and fix a point .

for example if you take the Model ' moving average '( since the past consumption keeps changes with time , they will calculate the moving average )

refer the link

http://help.sap.com/erp2005_ehp_04/helpdata/EN/7d/c27487454011d182b40000e829fbfe/frameset.htm

for exponential models , they will consider the error or the std deviation

refer the link

http://help.sap.com/erp2005_ehp_04/helpdata/EN/7d/c27487454011d182b40000e829fbfe/frameset.htm

http://help.sap.com/erp2005_ehp_04/helpdata/EN/7d/c27487454011d182b40000e829fbfe/frameset.htm

Regards,

[Former Member]

HI,

Thanks for the response.

Can anyone explain with an example? So that it will be easy to understand.

Thanks & Regards,

[kunal_ingale]

hi

post this thread to PP forum u will get more replys and ideas

check following link for simple calculation

http://help.sap.com/saphelp_erp60_sp/helpdata/EN/7d/c27a3b454011d182b40000e829fbfe/frameset.htm

here the formula given is

Reorder level = 100 + 30/30 * 200 + 10/30 * 300 = 400

here 100 is safety stock

here Replenishment lead time is 40 days means 30 + 10

then 30/30 means for per 30 days(1st subsequent period

) its 200 is stock so sotck for the 30 days will be 30/30*200

then for remaining 10 dayds stock will be 10/30*300 as 300 is the stock for 2nd subsequent period

then calculations come as 400

hope it helps

regards

kunal

[Former Member]

Hi Kunal,

Thanks for the reply. I have gone through the SAP help material since the same link is recommended by many.

But what I would like to know is how you will do a testing for Automatic reorder Point Planning & make sure that the re-order point which is getting determined automatically is correct.

Also if we want to do a testing what are the things we have to maintain?

Thanks & Regards,

[kunal_ingale]

hi

u can test it inur developement server and then implemnt in ur prd server

thne in prd server u can try firstly on one material then do it for rest

post this thread in PP forum we will get more views

regards

kunal

[Former Member]

Hi,

Thanks for the reply.

See my question is how you will do the testing with the above example & not where to do the testing?

Like what are the values you will maintain in the Mat.master (MRP & Forecast views) for a testing scenario & make sure that the Automatic Reorder Point is calculated correctly.

Hope you understood.

Thanks & Regards,