What is automatic reorder point planning in SAP PP-MRP - Material Requirements Planning?

SAP Term: automatic reorder point planning

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: A procedure in consumption-based planning. If available stock is below the reorder point, an entry is made in the MRP file indicating that the material must be included in the next planning run. During the next planning run a procurement proposal is created. The reorder point and the safety stock level are automatically determined by the forecast program.

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• Key Concepts: 
  Automatic reorder point planning is a component of SAP's Material Requirements Planning (PP-MRP) module. It is used to determine the optimal order quantity and timing of material replenishment for a given inventory item. The system takes into account the current stock level, lead time, and safety stock level to calculate the optimal order quantity and timing. 
  
  How to use it: 
  Automatic reorder point planning can be used to automate the process of determining when and how much material should be ordered. The system takes into account the current stock level, lead time, and safety stock level to calculate the optimal order quantity and timing. The user can then use this information to place orders with suppliers or adjust production schedules accordingly. 
  
  Tips & Tricks: 
  It is important to ensure that the safety stock level is set correctly in order for automatic reorder point planning to be effective. If the safety stock level is too low, there may not be enough inventory on hand when needed. On the other hand, if it is too high, there may be excess inventory that is not needed. 
  
  Related Information: 
  Automatic reorder point planning is closely related to other components of SAP's PP-MRP module such as material requirements planning (MRP) and capacity requirements planning (CRP). These components are used to determine the optimal production schedule and resource utilization for a given set of materials and products.