What is buffer level proposal in SAP PP-DD - Demand-Driven Replenishment?

SAP Term: buffer level proposal

• Component: PP-DD

• Component Name: Demand-Driven Replenishment

• Description: A well-balanced buffer level proposed by the Manage Buffer Levels app to ensure that a product or component is sufficiently stocked to meet average demand, but in low enough quantities to prevent excessive storage costs or losses due to expiry.

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• Key Concepts: 
  Buffer Level Proposal is a feature of the Demand-Driven Replenishment (PP-DD) component of SAP. It allows users to set a target buffer level for each material, which is then used to calculate the optimal order quantity for replenishment. The buffer level proposal takes into account the current stock level, the forecasted demand, and the lead time for replenishment. 
  
  How to use it: 
  To use the Buffer Level Proposal feature, users must first set a target buffer level for each material. This can be done in the PP-DD configuration settings. Once the target buffer levels are set, the system will automatically calculate the optimal order quantity for replenishment based on the current stock level, forecasted demand, and lead time. 
  
  Tips & Tricks: 
  When setting target buffer levels, it is important to consider both the forecasted demand and lead time for replenishment. Setting too low of a buffer level may result in stockouts, while setting too high of a buffer level may result in excess inventory. 
  
  Related Information: 
  For more information on Demand-Driven Replenishment (PP-DD) and Buffer Level Proposal, please refer to SAP Help documentation or contact your local SAP support team.