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E - How Automatic Reorder Point Calculated in Forecast

This document explains how the automatic reorder point is calculated in SAP when using forecasting. The reorder point is the sum of the safety stock and forecasted consumption within the replenishment lead time. The replenishment lead time is the sum of the planned delivery time, goods receipt processing time, and purchasing processing time. An example calculation is provided.

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200 views5 pages

E - How Automatic Reorder Point Calculated in Forecast

This document explains how the automatic reorder point is calculated in SAP when using forecasting. The reorder point is the sum of the safety stock and forecasted consumption within the replenishment lead time. The replenishment lead time is the sum of the planned delivery time, goods receipt processing time, and purchasing processing time. An example calculation is provided.

Uploaded by

saptarshi panda
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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SAP Knowledge Base Article

3322975 - How automatic reorder point calculated in forecast


Component: PP-MP-MFC (Material Forecast), Version: 1, Released On: 13.04.2023

Symptom
You'd like to know how automatic reorder point calculated when using forecast.
Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is
purely coincidental

Environment
SAP ERP Material Forecast (PP-MP-MFC)
SAP R/3
SAP R/3 Enterprise
SAP ERP Central Component
SAP ERP
SAP Enhancement package for SAP ERP
SAP Enhancement package for SAP ERP, version for SAP HANA
SAP S/4HANA, on-premise

Resolution
The reorder point is defined as the sum of the safety stock plus the requirement forecast within the replenishment lead time.
The formula is:
Total replenishment Lead Time = Planned delivery time + GR processing time + Processing time required by purchasing
Reorder Point = Safety Stock + Forecast consumption * Replenishment Lead Time / Forecast period

The following example is detail calculating process:

MRP type: V2
Lot size: EX
Planned Delivery Time: 5
GR processing time: 6
Processing time required by purchasing: 0
Safety stock: 0
Forecast model: G
Historical periods: 1
Forecast period: 1
Consumption values: March 2300
Forecast & base value: 2300

The calculation process contains the following 3 steps:


1. Purchase processing time in T-code OMDT
Planned delivery time & GR processing time in T-code MM03 -> MRP 2

According to note 306177, the planned delivery time is maintained in calendar days and must be converted into
workdays for the calculation of the replenishment lead time for the reorder point and safety stock. Since the planned
delivery time refers to the vendors (und not to the local plant) and no corresponding calendar can be maintained for the
vendors, in this case, a constant number of 5 workdays per week must be used.

So, the total replenishment lead time is:


5 * 5 / 7 + 6 + 0 = 10 days.
2. For monthly forecast, system uses 30 days as a month and only calculated workdays in forecast. So, the forecast days for
a month is:
30 * 5 / 7 = 21.429 days.
3. Finally, to calculate automatic reorder point, the result is:
0 + 2300 * 10 / 21.429 = 1073.333
Keywords
MP31, MM02, Automatic reorder point, Forecast, Formula, MRP, Safety Stock

Attributes
Key Value

Requires Action 0

Products
Products

SAP ERP Central Component all versions

SAP ERP all versions


SAP R/3 Enterprise all versions

SAP R/3 all versions

SAP S/4HANA all versions

SAP enhancement package for SAP ERP, version for SAP HANA all versions

This document is referenced by


SAP Note/KBA Title

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