What is pegged requirement in SAP PP-MRP - Material Requirements Planning?

SAP Term: pegged requirement

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: The next higher level of the bill of material that is the source of the requirement in a lower level, in the evaluations for material requirements planning.

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• Key Concepts: 
  Pegged requirement is a term used in SAP's Material Requirements Planning (MRP) component. It is a type of planned order that is created to satisfy a specific demand. This demand can be either an external customer order or an internal production order. The pegged requirement is linked to the source of the demand and will be automatically adjusted when the source changes. 
  
  How to use it: 
  In SAP, pegged requirements are created when the system runs MRP. The system will create a planned order for the required quantity and link it to the source of the demand. This planned order will then be used to satisfy the demand and will be automatically adjusted if the source changes. 
  
  Tips & Tricks: 
  When creating pegged requirements, it is important to ensure that the planned order is linked to the correct source of demand. This will ensure that the planned order is automatically adjusted when the source changes. 
  
  Related Information: 
  For more information on pegged requirements, please refer to SAP's official documentation on Material Requirements Planning (MRP).