What is forecast-based planning in SAP PP-MRP - Material Requirements Planning?

SAP Term: forecast-based planning

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: A procedure in consumption-based planning that is based on future requirements predictions calculated using the forecast. Forecast values for future requirements are determined by the integrated forecasting program. These values are the basis of the net requirements calculation in the planning run. In the case of a shortage for a forecast requirement, the system creates a procurement proposal.

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• Key Concepts: 
  Forecast-based planning is a component of SAP's Material Requirements Planning (PP-MRP) module. It is a tool used to plan and manage material requirements based on sales forecasts. It helps to ensure that the right amount of materials are available at the right time, and that production costs are kept to a minimum. 
  
  How to use it: 
  Forecast-based planning can be used to create a forecast of future material requirements based on historical data and current market trends. This forecast can then be used to plan production and procurement activities. The system can also be used to monitor actual material usage against the forecast, allowing for adjustments to be made if necessary. 
  
  Tips & Tricks: 
  When using forecast-based planning, it is important to ensure that the data used for the forecast is accurate and up-to-date. This will help to ensure that the forecast is as accurate as possible. Additionally, it is important to regularly review and adjust the forecast as needed in order to keep up with changing market conditions. 
  
  Related Information: 
  For more information on SAP's Material Requirements Planning (PP-MRP) module, please visit the SAP website at https://www.sap.com/products/materials-requirements-planning.html. Additionally, there are many online resources available that provide detailed information on how to use forecast-based planning in SAP.