When maintaining the material master record, you can define additional restrictions for the lot-sizing procedure:

minimum lot size

maximum lot size

rounding value

In static lot-sizing procedures, future shortages are not taken into account, that is, if a shortage exists, an order proposal is created for the amount defined for the static lot size. The system does not check to see when a future shortage exists.

If you select the lot-for-lot order quantity, an order proposal is created for the shortage quantity. If several issues exist on one day that cannot be covered, the system still only creates one order proposal covering the total shortage quantity on this particular day.

If you select the fixed lot size, the system creates an order proposal for the fixed lot size if a material shortage occurs. If this is not sufficient to cover the shortage quantity, then the system creates several order proposals for the same date until the shortage is covered.

If you select replenishment up to maximum stock level, when a material shortage occurs, the system creates an order proposal for the amount required to bring the stock level up to the maximum stock level recorded in the material master record.

In period lot-sizing procedures, requirements that lie within the predefined period lengths are grouped together into one lot.

The period length is based on the gregorian calendar (day, week, month) whereby the number of periods can be determined additionally.

You can use the planning calendar to detemine period lengths of your choice.

Optimum lot-sizing procedures optimize the total costs incurred for order costs and storage costs.

The principle of the optimum lot-sizing procedure is to keep grouping requirements together into one lot until the total costs are optimized - using various cost criteria.

Searching for point of intersection.

Requirements grouped together into one lot until the total warehouse costs exceed the lot size fixed costs.

In this example, the optimum lot size is 2000 pieces as if the lot size is set to 3000 pieces, the total warehouse costs (115.07) would be greater than the lot size fixed costs (100).

Search for minimum.

Requirements are grouped into one lot until the total costs per unit reach a minimum level.

The optimum lot size in this example is 2000 pieces as here the minimum cost per unit (0.07) is achieved.

Search for increase.

Requirements are grouped into one lot until the additional storage costs per period are greater than the savings on ordering costs per period.

In this example, the optimum lot size is 1000 pieces as if one more requirement is added, the additional storage costs (2.74) are greater than the saving on ordering costs (1.79).

Reqmts are grouped into one lot until the additional storage costs are less than the lot size fixed costs.

The additional storage costs are greater than the lot size fixed costs with a lot size of 4000 pieces. Therefore, the optimum lot size is 3000 pieces.