What is least unit cost procedure in SAP PP-MRP - Material Requirements Planning?

SAP Term: least unit cost procedure

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: A procedure for lot-size calculation with optimization of the sum of setup plus storage costs optimum lot-sizing procedure. Starting from the shortage date, successive requirements are grouped to form lots until total costs for each unit reach a minimum level. The total costs are equal to the sum of the lot size independent costs plus the total storage costs.

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• Key Concepts: 
  Least Unit Cost Procedure is a feature of SAP's Material Requirements Planning (MRP) component. It is used to determine the most cost-effective way to procure materials for production. The procedure takes into account the cost of the material, the cost of transportation, and any other associated costs. It then calculates the least unit cost for each material and determines the most cost-effective way to procure it. 
  
  How to use it: 
  The Least Unit Cost Procedure can be used in SAP's MRP component by selecting the "Least Unit Cost" option in the MRP run. This will enable the system to calculate the least unit cost for each material and determine the most cost-effective way to procure it. The system will then generate a report that shows the total cost of each material and its associated costs. 
  
  Tips & Tricks: 
  When using the Least Unit Cost Procedure, it is important to ensure that all associated costs are taken into account. This includes transportation costs, taxes, and any other costs associated with procuring materials. Additionally, it is important to ensure that accurate data is entered into the system so that accurate results can be obtained. 
  
  Related Information: 
  For more information on SAP's Material Requirements Planning (MRP) component and its features, please refer to SAP's official documentation. Additionally, there are many online resources available that provide detailed information on how to use SAP's MRP component and its features.