What is basic value in SAP PP-MP - Production Planning?

SAP Term: basic value

• Component: PP-MP

• Component Name: Production Planning

• Description: A part of the forecast model that displays the past level of the forecast model, during forecasting. Depending on the forecast model used, the system adds a trend value to basic value or it multiplies the basic value by the seasonal index. The basic value is calculated first by the system by means of historical data and is then updated after every period with the help of the alpha factor.

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• Key Concepts: 
  Basic value is a term used in the Production Planning and Manufacturing (PP-MP) component of SAP. It is a numerical value assigned to a material or resource that is used to calculate the cost of production. The basic value is determined by taking into account the cost of raw materials, labor, overhead, and other factors. 
  
  How to use it: 
  The basic value is used in the PP-MP component to calculate the cost of production for a given material or resource. This calculation is done by taking into account the cost of raw materials, labor, overhead, and other factors. The basic value can be adjusted to reflect changes in the cost of production over time. 
  
  Tips & Tricks: 
  It is important to keep track of the basic value for each material or resource in order to accurately calculate the cost of production. Additionally, it is important to regularly review and adjust the basic value as needed in order to ensure that it reflects current market prices and other factors. 
  
  Related Information: 
  The basic value is closely related to other terms such as standard cost and actual cost. Standard cost is the estimated cost of production based on historical data, while actual cost is the actual cost of production based on current market prices and other factors.