What is dynamic lot size in SAP PP-MRP - Material Requirements Planning?

SAP Term: dynamic lot size

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: A part of the optimum lot-sizing procedure. Starting from the shortage date, successive requirements are grouped to form a lot until additional storage costs are greater than lot size independent costs.

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• Key Concepts: 
  Dynamic lot size is a feature of SAP's Material Requirements Planning (MRP) component. It allows for the automatic calculation of the optimal lot size for a given material based on the current demand and supply situation. This helps to ensure that the right amount of material is available when needed, while avoiding overstocking or understocking. 
  
  How to use it: 
  Dynamic lot size can be enabled in the MRP configuration. Once enabled, the system will automatically calculate the optimal lot size for each material based on the current demand and supply situation. The system will also take into account any safety stock that has been set up for the material. 
  
  Tips & Tricks: 
  It is important to ensure that the safety stock levels are set correctly in order to get the most out of dynamic lot size. If the safety stock levels are too low, then there is a risk of understocking, while if they are too high then there is a risk of overstocking. 
  
  Related Information: 
  Dynamic lot size is just one of many features available in SAP's Material Requirements Planning (MRP) component. Other features include automatic reordering, lead time scheduling, and capacity planning.