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

SAP Term: lot size

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: A quantity to produce or procure. The lot size is used as a criterion for: Selecting alternatives in a multiple BOM Selecting a routing for a production order Selecting an operation in alternative operations Pricing during the sale or purchase of goods

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• Key Concepts: 
  Lot size is a term used in SAP's Material Requirements Planning (MRP) component. It is the quantity of a material that is planned to be produced or procured in a single production run or purchase order. Lot size helps to determine the optimal order quantity for a material, taking into account factors such as lead time, cost, and availability. 
  
  How to use it: 
  In SAP, lot size can be set up in the material master record. The lot size can be fixed or variable, depending on the needs of the business. For example, if a company produces a large number of items with short lead times, they may choose to use a fixed lot size. On the other hand, if they produce items with long lead times and high costs, they may choose to use a variable lot size. 
  
  Tips & Tricks: 
  When setting up lot size in SAP, it is important to consider the lead time and cost of the material. If the lead time is too long or the cost is too high, it may be more efficient to use a different lot size. Additionally, it is important to consider any seasonal fluctuations in demand when setting up lot size. 
  
  Related Information: 
  Lot size is closely related to safety stock and reorder point. Safety stock is an additional amount of inventory that is kept on hand in case of unexpected demand or supply disruptions. Reorder point is the level at which an order for more inventory should be placed. Both safety stock and reorder point are determined by the lot size of the material.