SAP MRP

SAP MRP is carried out in five steps: 1) Net Requirement Calculation 2) Lot-Size Procedures / Calculation 3) Procurement Types / Proposal 4) Scheduling 5) BOM Explosion 1) Net requirement calculation - A comparison of firmed receipts & requirements takes place along time axis. - If a material shortage occurs then the system calculates a net requirement. - Available Qty is Stock-Safety Stock. - Net requirement = Total requirement - Avail Qty. - You can define the available part of the safety stock in a MRP group. - New order proposals are not created until stock levels have fallen below the available portion of safety stock 2) Lot size Procedures There are 3 Lot sizing procedures in SAP R/3 Static, Periodic & Optimum lot sizing. a) Static lot sizing –Lot-to-lot order quantity –Fixed lot size –Replenish up to maximum stock level b) Periodic lot sizing –Daily lot size –Weekly / Monthly lot sizing –Flexible periods according to planning calendar c) Optimum lot sizing –Part period procedure –Least unit cost procedure –Gross reorder procedure –Dynamic lot size creation -Net requirements are used in lot size calculations to determine the quantities of the individual order proposals -For period or optimum lot-sizing procedures, several net requirements are clubbed together in one order proposal.

-Lot sizes can be restricted by using options -–Define maximum or minimum lot size -–Rounding value functions 3) Procurement types - Procurement types define whether a material is produced in-house or procured externally. - If the procurement type is “E” then the system always uses in-house production time. - If the procurement type is “F” then the system always uses Planned delivery time - All other types of procurement like stock transfer, sub-contracting, production in other plant are carried out using special procurement key. - Procurement key & special procurement key are available in MRP-2 screen of material master. 4) Scheduling Backward Scheduling - The goods receipt processing time specifies the number of workdays required by the stores person to check the material received & to place it in stock. - In-house production time is calculated by adding lead time & the floats before & after production. - The opening period represents the processing time required by the MRP controller for converting the planned orders. Forward Scheduling - The system schedules forward starting from the basic start date. - "today" scheduling: The system carries out forward scheduling using the current date as a basic start date. 5) BOM explosion - In BOM explosion, the system calculates the components or assemblies required for the appropriate BOM - The key date for evaluation of the BOM (Explosion date) is the order finish date of the planned order - Using the lead time offset in the BOM you can displace the dependent requirements

date of a specific component.