LotSize procedure--HB (Replenishment up to Maximum Stock Level)

Replenishment up to Maximum Stock Level 

Use

You use the lot-sizing procedure Replenishment up to maximum stock level if you want to fill the stock up to the highest possible level or if you can only store a certain quantity of a material due to the container size. This applies to a tank, for example. The capacity of the tank determines the maximum stock level.

You can use this lot-sizing procedure with reorder point planning or MRP.

The system calculates the lot size according to the formula for the MRP procedure.

Prerequisites

You have entered HB in the Lot size field and the maximum quantity to stock in the Maximum stock level field in the material master record.

Features

• If you use this lot-sizing procedure in material requirements planning, the system creates an order quantity to bring the stock level up to the maximum stock level. If, however, the requirements for one day are greater than the maximum stock level the system creates an order quantity for the required quantity. In this case, a balanced stock/requirements situation is given higher priority than the lot-sizing procedure.
• If you use this lot-sizing procedure with reorder point planning without taking external requirements into account, the system creates an order proposal in the planning run to cover shortages. The order quantity for the proposal is the difference between the maximum stock level defined in the material master and the current warehouse stock and the existing fixed receipt elements:

Maximum stock level
- Current warehouse stock
- Existing fixed receipt elements
---------------------------------------------------
= Lot size

 

• In reorder point planning where external requirements are taken into account, additional requirements are also included in the calculation. MRP tries to achieve two goals with this lot-sizing procedure:
• To make sure that all requirements are covered
• To make sure that the predefined maximum stock level is not exceeded

The requirements dates are not taken into account. The system calculates the total of all requirements.

The calculation of the lot size occurs in two steps using two formulas:

Formula 1:

Maximum stock level
- Current warehouse stock
- Existing fixed receipt elements
---------------------------------------------------
= Lot size

Formula 2:

Reorder point
+ Total requirements (or total requirements in replenishment lead time)
- Current warehouse stock
- Existing fixed receipt elements
---------------------------------------------------
= Lot size

The system creates the order proposal using the greater of the two lot sizes calculated.

• As of Release 4.0, there is a new variant for the lot-sizing procedure with reorder point planning where external requirements are taken into account.
  The calculation variant also applies to MRP.

With the new calculation method, the system orders the quantity that brings the stock level up to the maximum stock level and that also satisfies all requirements.
If you want to use this new variant, you have to go to Customizing for MRP to Check lot-sizing procedure, choose lot-sizing procedure HB (Replenishment up to maximum stock level) and then in the Maximum stock level variant field, choose indicator 1.
The system calculates the lot size using the following formula:

Maximum stock level
+ Total requirements
- Current warehouse stock
- Existing fixed receipt elements
---------------------------------------------------
= Lot size

Maximum stock level

Maximum Stock level is a Quantity of the material in this plant that may not be exceeded. In materials planning, the maximum stock level is used only if you have chosen Replenish to maximum stock level as the lot-sizing procedure; that is, you have entered HB as the lot size key. Enter a value if you have chosen Replenish to maximum stock level as the lot-sizing procedure.

 

If you have chosen to work on Maximum stock level then the system procures for the maximum stock level quantity and then adds the Procurement quantity to that.

 

Examples:

 

a) If the Maximum Stock level is 500 and the demanded quantity is 45, then the system creates a planned order of 545, thereby first ensuring the 500 stock is filled up and then the demand quantity is added to that.