What is reduction factor in SAP SCM-APO-ATP - Global Available-to-Promise?

SAP Term: reduction factor

• Component: SCM-APO-ATP

• Component Name: Global Available-to-Promise

• Description: A factor that is used in interactive backorder processing. For selected requirements in interactive backorder processing, the previously confirmed quantity can be multiplied by the factor specified and therefore reduced. &EXAMPLE& In a "tight" confirmation situation fewer important requirements can be selected and their confirmation can be changed. The reduction factor 0.1 is specified, the confirmed quantities of the selected requirements are reduced to 10%.

Smart SAP Assistant

• Key Concepts: 
  Reduction factor is a feature of the Global Available-to-Promise (ATP) component of SAP's Supply Chain Management (SCM) module. It is used to reduce the amount of available stock that is reported in the ATP check. This is done to ensure that the ATP check does not overstate the amount of stock available for a customer order. 
  
  How to use it: 
  The reduction factor can be set up in the ATP configuration settings. The user can specify a percentage or an absolute value for the reduction factor. The reduction factor will then be applied to the available stock when the ATP check is performed. 
  
  Tips & Tricks: 
  When setting up the reduction factor, it is important to consider how much stock should be reserved for safety stock and other contingencies. The reduction factor should be set to an appropriate level so that it does not overstate the amount of available stock. 
  
  Related Information: 
  The reduction factor is one of several features of the Global ATP component of SAP SCM. Other features include availability checks, order promising, and delivery scheduling. All of these features work together to ensure that customer orders are fulfilled in a timely and accurate manner.