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Lot-sizing procedures

rajesh_sutar2
Active Contributor
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Hi Experts,

Can anybody please explain difference between following lot-sizing procedures.

static lot-sizing procedures

period lot-sizing procedures

optimum lot-sizing procedures

It will very much helpful if explain with example. Will appreciate with deserving point.

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Dear Raja,

Pls. find details about Lot Sizing Procedures :

Static Lot-Sizing Procedures

Use

In static lot-sizing procedures, the procurement quantity is calculated exclusively by means of the quantity specifications entered in the material master.

Features

The following static lot-sizing procedures are available:

Lot-for-lot order quantity

Fixed lot size

Fixed lot size with splitting and overlapping

Replenishment up to maximum stock level

Period Lot-Sizing Procedures

Use

In period lot-sizing procedures, the system groups several requirements within a time interval together to form a lot.

Features

You can define the following periods:

days

weeks

months

periods of flexible length equal to posting periods

freely definable periods according to a planning calendar

The system can interpret the period start of the planning calendar as the availability date or as the delivery date.

Splitting and overlapping are also possible for all period lot-sizing procedures

The system sets the availability date for period lot-sizing procedures to the first requirements date of the period. However, you can also define that the availability date is at the beginning or end of the period.

Optimum Lot-Sizing Procedures

Use

In static and period lot-sizing procedures, the costs resulting from stockkeeping, from the setup procedures or from purchasing are not taken into consideration. The aim of optimum lot-sizing procedures, on the other hand, is to group shortages together in such a way that costs are minimized. These costs include lot size independent costs (setup or order costs) and storage costs.

Taking Purchasing as an example, the following problem hereby arises:

If you order often, you will have low storage costs but high order costs due to the high number of orders. If you only seldom place orders then you will find that your order costs remain very low, but your storage costs will be very high since warehouse stock must be large enough to cover requirements for a much longer period.

Features

The starting point for lot sizing is the first material shortage date that is determined during the net requirements calculation. The shortage quantity determined here represents the minimum order quantity. The system then adds successive shortage quantities to this lot size until, by means of the particular cost criterion, optimum costs have been established.

The only differences between the various optimum lot-sizing procedures are the cost criteria. The following procedures are available:

Part Period Balancing

Least Unit Cost Procedure

Dynamic Lot Size Creation

Groff Reorder Procedure

Hope this helps.

Regards,

Tejas

rajesh_sutar2
Active Contributor
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Hi Experts,

Very thankful to you.

Understood.

Answers (1)

Answers (1)

Former Member
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Hi Raja,

static lot-sizing procedures

This procedure focuses on the quantity aspect of the need.

- Lot-for-lot order quantity - For every need a proposal is created (useful when it is a high value item or bulky)

- Fixed lot size - This is preferred when your vendor or in-house production makes economica sense to procure / produce in that qty

- Fixed lot size with splitting and overlapping - This is preferred when you know the qty to be produced but want to procure / produce over a given period of time instead of at one time.

- Replenishment up to maximum stock level - This is preferred when the value of the stock is relatively low but the consumption is high

period lot-sizing procedures

This procedure focuses on the time aspect of the need.

- days - Each days need is collated to create a single procurement proposal

- weeks - Each weeks need is collated to create a single proposal

- months - Each month's need is collated

- periods of flexible length equal to posting periods

- freely definable periods according to a planning calendar

The above two are when you want to have flexibility in the period defined

optimum lot-sizing procedures

This procedure focuses on the cost aspect

- Part Period Balancing

- Least Unit Cost Procedure

- Dynamic Lot Size Creation

- Groff Reorder Procedure

For the above i would suggest, study the SAP help which is quite illustrative & clear.

http://help.sap.com/saphelp_erp60_sp/helpdata/en/f4/7d3f9344af11d182b40000e829fbfe/frameset.htm

Hope the above was helpful.

Regards,

Vivek