Forecasting formula calculation in Automstic reorder point plannig

Dear Experts,
We are using R/3 ECC 6.0 we want to implement Automatic reorder point planning. for this basic settings i know.
suppose i taken 430,590,350,490,495,520 value for hitsory from Jan 2009 as conusmtion value for testing purpose.
My history periods is 6 & forecast period is 6,Initialization periods is 6. Alpha factor is 0.1 & Beta is 0.2, Tracking limit is 4.00 & Forecast model is T. can any one tell me how it is calaculted basic Value, MAD, Trend Value are calculated for trend or seasonal model.
Thanks in advance, awating for ur valuable reply.
Best Regards,
Dev

HI
AS YOU SAID , THE INITIATION PERIOD WILL NOT BE SAME FOR ALL THE FORCASTING METHODS. PLS
GO AND USE THE APO LIBRARY.

Similar Messages

Change the MRP run fro Reorder Point to Forecast Based.

Dear Experts
My client is a battery manufacturing company, its Semi Finished product is Make-to-Stock and Finished Product is Make-to-Order. Initially the MRP was configured as reorder based and in Material master it was set as VM (Automatic reorder point plng ). But now we need to change the MRP form reorder point to Forecast Based. The rolling forecast of the coming 3 three months is given in Planned Independent requirement (MD61) as version u201800u2019 - REQUIREMENTS PLAN.
We have changed the MRP procedure in Material Master form VM to VV Forecast-based planning of the finished product but unable to get any result means no Automatic PR is getting generated, the we have changed all the materialsu2019 MRP procedure of that Particular BOM to have the required MRP and Automatic PR raise but still no expected result is coming.
I would request you to provide your expert opinion to execute the Forecast Based MRP, what else should I do achieve the Linking between the Rolling Forecast and MRP instead of Reorder point. Should I have to make changes in Material Master (Only on finished product, In house developed/manufactured Product, Raw material etc), any configuration change in MPR and PR . Looking forward for your specialist advice.
Regards
Sony

I have provided the demand in MD61 and make stock level of the material in such a way that it should raise the PR for MRP run but it is not generating any PR. have checked that if I put value in the forecast tab of the material master manually then it is raising the PR but I need the system to pick the value form the demand that I provided in MD61. Is there any configuration related issue to get the values form the demand and generate PR accordingly. Please guide
Should I have to provide 'VV' at the first level of the Material at its master data or at each component of the BOM irrespective of
the components for Semi-Finished (In house production), Raw materials (Procure from the supplier). Please suggest...

Calculation of Safety Stock and Reorder Point under Forecast Model T

Hi Gurus!
Happy Holiday!
I would like to ask for your assistance on how the the safety stock and reorder point was calculated with the following values available. I would really appreciate it if you could give me details on the calculation.
Below are the values:
Basic data
Forecast date        01.12.2009        Unit                  CTN
Forecast model       T                 Service level         0.0
Period indicator     M                 Paramtr profile
Control data
Initialization                                Tracking limit        4.000
Model selection      A                 Procedure selection   2
Parameter optimizatio                Optimization level    F
Alpha factor         0,10               Beta factor           0,10
Gamma factor       0,00              Delta factor          0,30
Basic value           5.464-           Trend value          5.603-
MAD                      4.758            Error total              4.722
Safety stock         1                   Reorder pnt.          1
No. of values
Consumption           6                Forecast periods       1
Initial. periods      0                Fixed periods          0
Periods per season   12
Historical data
Period                Original     Corrected value
11.2009                3.000              3.000
10.2009                0.000              0.000
09.2009                0.000              0.000
08.2009                9.000              9.000
07.2009               21.000             21.000
06.2009               20.300             20.300
Forecast results
Period                Original     Corrected value
12.2009                0.000              0.000
Appreciate your assistance!
Thank you and Happy Holidays!
Ji

Sweth, you are asking for consulting, and in my opinion it is way beyond what can or should be reasonable to achieve in such a forum. You are asking complex questions, that most probable have more than one possible answer.
I suggest that you get on-site help from a knowledgeable and experienced consultant. These are crucial business issues, and should be dealt seriously.

Automatic reorder point calculation

I would like to confirm the formula for calculating a reorder point in SAP.
As I understand it, the simple formula is safety stock + average requirements * lead time.
I have the following settings for a material:
MRP Type - V2
Lot size - HB
Maximum stock level - 500
Total lead days (including GR processing) - 30
Service Level - 98%
Procurement type - F
Historical periods - 2
Forecast periods - 2
Period Indicator - M
Forecast Model - G (Moving average)
Consumption values - 12/2010 - 160
11/2010 - 190
When I execute the forecast run, the get the following result:
Basic Value - 175
MAD - 15
Safety Stock - 39
Reorder point - 219
If the formula for calculating reorder point is - 39 (safety stock) + 175 (average requirement) * (30(lead time)/30(forecast period in days), then the reorder point should be 214. Why does the system output 219?
I read somewhere that a SAP note exists for correcting the calculation, can anyone confirm?
Many thanks.

Dear
Automatic calculation of reorder point RP : The reorder point will be calculated with following formula :
RP = average consumption during LT + SS
SS = R x Sq root ( ( LT(d) x 7 ) / FCperiod(d) x 5 ) x MAD
In your case , ROP will be calulated as per your consumption for November with 20 days having consumption of 190/m and December for 10 days having consumption of 160 /month
So Reorder Qty = 190(20/30)+160(10/30)+39 =219
Refer our earlier posting on the same : Detail the safety stock calculation
Regards
JH

Difficulties in Reorder point calculation

Hi,
I know there are number of posts in the forum on this topic. But I could not find my answer in them.
So please help me understand the reorder point SAP is calculating.
I have a material with following data:
MRP type = V2 (Automatic reorder point calculation)
Planned delivery time = 3 days
GR processing time = 0
Safety stock = 0
Service level = 0
Forecast model = G (Moving average model)
Period indicator = W
Historical period = 9
Forecast period = 1
Consumption values = 3,4,5,6,7,8,9,10,11
SAP gives me the result as below:
Forecast = 7 (Matches with my calculation)
Safety stock =0 as service level not maintained (I agree)
Reorder point = 6
My calculation is, reorder point = SS+ forecasted requirement during replenishment lead time
= 0 + 7 * (3/7) = 3
Why SAP has calculated 6 instead of 3 ?
Thanks in advance.

Thanks Jurgen.
I have found the issue. The 'Procurement time' was defined as 1 day in customizing of CBP. This was causing the issue.
Thanks to all of you who replied to the thread.

Difference :Automatic Reorder Point Planning and Forecast based palning ?

Dear MM Guru's,
As we See in throtical Concepts that
Automatic Reorder point planning and Forcast Based Planning Used the prevuious Historical Data.
Please explain what is difference Between them.
regards,
A. S.

Hi,
Reorder Point Planning: -
Use: -
In reorder point planning, procurement is triggered when the sum of plant stock and firmed receipts falls below the reorder point.
Features: -
The reorder point should cover the average material requirements expected during the replenishment lead time.
The safety stock exists to cover both excess material consumption within the replenishment lead time and any additional requirements that may occur due to delivery delays. Therefore, the safety stock is included in the reorder level.
The following values are important for defining the reorder point:
- Safety stock
- Average consumption
- Replenishment lead time
The following values are important for defining the safety stock:
- Past consumption values (historical data) or future requirements
- Vendor/production delivery timelines
- Service level to be achieved
- Forecast error, that is, the deviation from the expected requirements
Manual Reorder Point Planning
In manual reorder point planning, you define both the reorder level and the safety stock level manually in the appropriate material master.
Automatic Reorder Point Planning
In automatic reorder point planning, both the reorder level and the safety stock level are determined by the integrated forecasting program.
The system uses past consumption data (historical data) to forecast future requirements. The system then uses these forecast values to calculate the reorder level and the safety stock level, taking the service level, which is specified by the MRP controller, and the material's replenishment lead time into account, and transfers them to the material master.
Since the forecast is carried out at regular intervals, the reorder level and the safety stock level are continually adapted to the current consumption and delivery situation. This means that a contribution is made towards keeping stock levels low.
Forecast-Based Planning: -
Use: -
Forecast-based planning is also based on material consumption. Like reorder point planning, forecast-based planning operates using historical values and forecast values and future requirements are determined via the integrated forecasting program. However, in contrast to reorder point planning, these values then form the basis of the planning run. The forecast values therefore have a direct effect in MRP as forecast requirements.
Features: -
The forecast, which calculates future requirements using historical data, is carried out at regular intervals. This offers the advantage that requirements, which are automatically determined, are continually adapted to suit current consumption needs. The forecast requirement is reduced by the material withdrawal so that the forecast requirement quantity that has already been produced is not included in the planning run again.
Reducing Forecast Requirements
- Reducing forecast requirements by consumption
If consumption is higher than the forecast requirements in the current month, then the system also reduces future forecast requirements.
- Reducing current forecast requirements by consumption
If consumption is higher than the forecast requirements in the current month, then the system does not reduce future forecast requirements.
- Average reduction of the forecast requirements
The reduction of the forecast requirements is based on average daily consumption. Actual consumption data is not relevant.
The system calculates the average daily requirement first using the formula forecast requirement/number of workdays in the forecast period.
The forecast requirements are then reduced by the quantity resulting from the following formula: number of workdays worked x average daily requirements.
Period Pattern and Forecast Periods
You can specify the period pattern for the forecast (daily, weekly, monthly or per accounting period) and the number of periods to be included in the forecast individually for each material. It is possible, however, that the forecast period pattern is not specific enough for planning purposes. In this case, you can define per material that the forecast requirements should be divided according to a finer period pattern for planning. You can also define how many forecast periods are to be taken into account during requirements planning. The splitting indicator is defined in Customizing for MRP per plant and per period unit and is assigned to the material in the material master.
Example: -
For a monthly forecast, the requirements date would be set on the first workday of the month because, for planning, it is assumed that the total requirement must be available at the beginning of the period. You can then divide this monthly requirement into either daily or weekly requirements.

Safety stock and Reorder point calculation in inventory planning

Hi,
How System does the calculation of own safety stock, and Reorder point, maximum safety stock level at parent and child location while running inventory planning services in SAP APO SPP. does anyone about the calculation please let me know
Regards
Puneet

Hi,
How System does the calculation of own safety stock, and Reorder point, maximum safety stock level at parent and child location while running inventory planning services in SAP APO SPP. does anyone about the calculation please let me know
Regards
Puneet

BAPI_MATERIAL_MAINTAINDATA_RT reorder point & Forecast parameters

Hi
I use BAPI_MATERIAL_MAINTAINDATA_RT for change reorder point and only this, but after run i see that the forecast parameters changed too.
example code
head-material = matnr.
head-logst_view = 'X'.
plant-material = matnr.
plant-plant = werks.
plant-reorder_pt = value.
plantx-material = matnr.
plantx-plant = werks.
plantx-reorder_pt = 'X'.
CALL function 'BAPI_MATERIAL_MAINTAINDATA_RT'
EXPORTING
     headdata = head
Importing
     return = return
TABLES
   plantdata = plant
   plantdatax = plantx.
I try to select/deselect auto_reset (reset forecast model automatically) but nothing was changed.
Do you know what is wrong whit this??
Best Regards
Szymon Glapiak
Edited by: Szymon Glapiak on Nov 4, 2008 6:20 PM

Hi,
You might need to check for an OSS Note for this BAPI.
For detailed Desc of BAPI, Refer to http://abap.wikiprog.com/wiki/BAPI_MATERIAL_MAINTAINDATA_RT
Or you can also use WE60 for IDOC ARTMAS01, the segment definition will help you to understand the BAPI parameters.

Setup of reorder point planning and forecasts

Can someone please tell me the setup steps of reorder point planning and forecast sets..
I hav seen the documentation but am complete lost
Need ur help!
Emm

Hi Emm,
1. Create an item for which the inventory planning method should be reorder point planning along with that provide the minmum order quantity & maximu ordered quantity and the Source type should be supplier.
2. Navigate to > planning > forecasts > Sets: to define the Forecast Quantity. ( First Forecast Set, then Forecast Line, then Forecast Items > inside this define the forecast quantity.
3. Define the safety stock by navigating to Planning > Safety Stocks .
4. Then submit the reorder point planning with parameters as restock – yes and name of your forecast.
Regards,
Jyoti

Automatic reorder point planning -forecast view

Hi
Our client want to implement automatic reorder point Planning.
Reorder point quantity was maitained from last 3 years but MRP type is 'ND' as they are not using MRP.
Now i am changing MRP type to:VM and in forecastting view: i maintained model as:D constant model period indicator:M
His periods:60 , forecast periods:12 initialization:X tracking limit:4000 selection procedure:2 reset automatically
Is it ok ? than can i run MP30. and the client wants to run for many materils(2000).
How can be run for many materials.?
Regards,
srihari.M

Dear,
In automatic re-order oint planning , system uses past consumption data (historical data) to forecast future requirements. The system then uses these forecast values to calculate the reorder level and the safety stock level, taking the service level, which is specified in MRP2 view, and the material's replenishment lead time into account, and transfers them to the material master.
Since the forecast is carried out at regular intervals, the reorder level and the safety stock level are continually adapted to the current consumption and delivery situation. This means that a contribution is made towards keeping stock levels low.
From MP30 you have to executed forecast and system has generated forecast values and updated safety stock and reorder point also. Only thing to remember is you have to maintain service level in MRP 2 view of material master when you use VM- MRP type to calculate safety stock and reorder point
Find bleow the set up following set up for automatic re-order point planning :
1.Material Master Set up : Maintain all the relevent parameters from MRP1 to MRP4 view , Forecasting View
1.MRP Type -VM , Lot Size -EX
2.Procurement Type -E for FG and F for ROH
3.Planning Startegy -10 or 40 in FG/SFG and 20 for componenet
4.Planned Delivery Time in MRP2 VIEW
5.Indiviaul/Collective Indicator - 1/2 based on your requirement in MRP4 View
6.BOM Explosion -Keep it blank
7.Service level percentage -MRP2 view
8.Maintain Forecastin view data like model selection , Histry period , period indicator , Forecast control pramaters ,
10.Make sure that you have min 12-8 monhts total consumption update in Forecasting view .
Configuration : InSPRO -MRP -Check MRP Type -VM-check the details like Re-Orde point .Safety Stock both the automatic calcvualtion box are marked .
Finally as a sample test , select any material -mm02-execute forecast in mm02-forecasting view -exectute forecast -then save .Run MRP in MD03-1,1,3,3,1.NETCH indicator and check the result in MD04
HOPE IT WILL HELP. PLEASE REVERT BACK.
Regards,
Alok Tiwari

Regarding reorder point planning.

Hi experts,
I have entered safety stock as 40 pcs., reorder point 50 and created requirement for
may 09 - 30 pcs.
jun-09 - 30 pcs.
After executing MRP run it is showing planned order for 50 pcs. only.
But the requirements are not covered I mean to say at last the available qty should be zero.
Please help me on this immediately.
Rgds,
Parul.

In Consumption based planning(re-order point planning), planned independent requirements or dependent requirement will not be considered in the net requirements calculation. Instead, it is triggered when stock levels fall below a predefined reorder point .So, all the planned independent or dependent requirements in a certain period of time should have been considered before setting the reorder point
Therefore, these planning procedures are used in areas for planning both B- and C-parts and operating supplies.(low value materials, but consumption is more)
In reorder point planning, SAP checks whether the available stocks are below the reorder point that has been set for the material. If they are, SAP will create procurement proposal.
We can determine the reorder point manually (u201CVB-Manual reorder point planningu201D MRP Type in standard SAP R/3) or, it can also be calculated automatically using the material forecast (u201CVM-Automatic reorder point planningu201D MRP Type in standard SAP R/3).
In standard SAP R/3 system, besides u201CVB u2013 Manual Reorder Pointu201D and u201CVM u2013 Automatic Reorder Pointu201D MRP Types, there are also other MRP Types that have reorder point as its basis to calculate requirement with additional procedure which count external requirement (sales order and manual reservation) as a requirement. The MRP Type are: u201CV1-Manual reorder point with external requirementsu201D and u201CV2-Automatic reorder point with external requirementsu201D.
If you want to include requirements in the reorder point calculation in addition to the customer requirements and manual reservations,
go to SPRO ->Materials management ->consumption based planning ->master data -> MRP Types
Select the mrp type v1 and
select the following fields:
o     Requirements for materials to be provided in subcontracting
o     Dependent order reservations on the basis of production orders
o     Dependent order reservations on the basis of maintenance orders or networks
o     Release orders
o     Purchase requisition releases
o     Forecast delivery schedules
regards,
sikkandar basha

Automatic reorder point and safety stock caluclation- MRP type:V2

Hi,
I want the system to calculate reorder point and safety stock. To simulate this i created one material with
MRP type:V2, service level as 97%, Forecast model:D,Hist. period:12,Forecast periods:12, and I entered
the historical value for past 12 months as 100 nos in material master.
04.2009     100
03.2009     100
02.2009     100
01.2009     100
12.2008     100
11.2008     100
10.2008     100
09.2008     100
08.2008     100
07.2008     100
06.2008     100
05.2008      100
Then I went to MP30 and executed the forcase.When I checkd the material master the system has calculated the reorder point as 14 nos. But there is no value updated in safety stock field.
Now I have two questions.
1) How the system has arrived the reorder point value as 14 nos.
2) Why there is no safety stock updated in material master.
Could u please clarify this.
Thanks and Regards
Purushothaman

Hi,
This is further to my preivous mail. I have changed the consumption values and now i am getting the safety stock.
MRP type:V2, service level as 97%, Forecast model:D,Hist. period:12,Forecast periods:12, and I entered
the historical value for past 12 months as.
04.2009     100
03.2009     80
02.2009     110
01.2009     85
12.2008     90
11.2008     95
10.2008     125
09.2008     90
08.2008     90
07.2008     92
06.2008     101
05.2008     100
After executing the forecase the sytem has calculated the below parameter.
Basic value:95.759
MAD:11.448
Safety stock:10.252
Reorder point:23.658.
Can anyone explain me how these calculation arrived.
Thanks and regards
Purushothaman

Reorder point

HI Gurus,
Can anybody please help me with this problem. There are about 1600 MRO items which i have setup for running mass forecast in MP38. This job runs in the background every monday. But after some time, the reorder point is again coming back to zero. Why could this be happening. Any ideas to start to debug this one, The MRP type is VM. All these materials have some histroy of atleast 1 EA of consumption in the last 30 months.
The settings on the forecasting view are Forecast model - D (constant model), Histroical periods 30. Forecast periods - 3,
Period indicator - M,(month), Initialization - X, tracking limit - 4.000, Reset automatically checked, parameter optimization checked, Selection procedure - 2 . Here is an intersting thing. Today when the forecast job ran, the forecast model (D) which was populated is blank in the forecast model feild. But if i were to run the forecast on this material now via MM02 or MP38 again, i will definitely see the reorder point again. But next week again when the job runs for siome reason the reorder pioint is zero againa. this is problem with only a set of 1600 materials . All the ither 5000 MRO items which have VM reorder point are good. Any thoughts or ideas so that we could attack this problem please?
One other thing, the service level is zero for all these 1600 materials which are having a problem, where as the materials which have no problem have some service level of 90 to 95 dpending on the material, there i do see that there is safety stock calculated and also the reorder point. So maybe in these 1600 matertials, the consumption in hte past histroy is so low that when the system runs forecast it is not able to move up the reorder point and safety stock. could that be the reason?
Thanks
ANusha
Edited by: anusha vemulapati on Apr 4, 2011 3:56 PM

Hi Anusha,
It is very likely that if you are running a Forecast with:
The settings on the forecasting view are Forecast model - D (constant model),
Histroical periods 30.
Forecast periods - 3,
Period indicator - M,(month)
And you have almost no consumption of that material the Forecast value = 0 (You can check if this is the case)
Do you have almost 3 years of backward history? If not I would suggest you to reduce the Historical period value!!. (Beacuse 30 month if you do not have history will reduce your forecast value.
IE consumption of the material = 30 units,
Created = Last Month
Forecast value = 30Units/30 Month = 1 Unit per month!!!
If your historical value is only 1 month then the value = 30
Another suggetion: If you have periods with cero consumption instead of using D constant, try using G, because D model is too much dependant on the consumption of the period before the forecast.
Hope I helped you.
Kind regards,
Federico

MRP TYPE IN REORDER-POINT PLANNING

Hi
I would like to know the difference between the V2 and VM MRP type in the individual Material Master record.
Because, for me, both are for Automatic Reorder-Point Planning and I don't know which I have to choose.
Thanks in advance.
Best regards.

Forecast program is used to calculate reorder point.
check this document
[http://help.sap.com/erp2005_ehp_03/helpdata/EN/f4/7d257044af11d182b40000e829fbfe/content.htm]
Even when you the calculation is based on past consumptions, in the forecast view you maintain parameters for tendency (seasonal, etc), how many periods are to be taken into consideration and you may also manually adjust consumption quantities. You may refer consumptions to other materials (i.e. when you have a new material code, replacing an old one, you can use this old one historical consumption data to calculate reorder point).
Hope this helps

Lot quantity to order for a material set as reorder point planning

Dear All,
Suppose the requirements of a material are as follows:
Week1 Required quantity - 100
Week2 required quantity - 150
Week3 required quantity - 300
Week4 required quantity - 500
This material is set as "VB" (Reorder point planning in the material master)
My questions is:
Can we use periodic lot sizing procedure for a material planned based on reorder point planning , so that MRP run will consider the requirements of a month (1050) and use that as the lot size to order material.
We want to plan the material if it falls below the reorder level, but we want the system to dynamically calculate the quantity to order based on the actual demand (and not on either fixed lot size or maxmimum stock level).
with regrds
Laxmipathi.G.V

Hi
Use Anyone of the following
1. Use automatic reorder point with forecast planning requirment.Where ssytem will calculate reorder point automatically based on weekly /monthly Forecast req.In this case Lot size you can use EX itself.
2. Use Planning type PD and lot size EX and Instaed of ROL use safety stock so that system will consider weekly sale req. and also safety stock according to that procerement proposal will be created.
Regards,
Velmurugan S

Forecasting formula calculation in Automstic reorder point plannig

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