What is 'economic order quantity' in SAP SCM-APO-SPP - Service Parts Planning?

economic order quantity - Overview

• Component: SCM-APO-SPP

• Component Name: Service Parts Planning

• Description: Purchase order quantity of a location product that considers the relationship between stockholding costs and transportation costs in order to optimize the total costs.

economic order quantity - Details

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  Key Concepts: 
  Economic Order Quantity (EOQ) is a concept used in SAP SCM-APO-SPP Service Parts Planning to determine the optimal order quantity for a given item. It is based on the idea that ordering too much or too little of an item can be costly, and that there is an optimal order quantity that minimizes the total cost of ordering and holding inventory. 
  
  How to use it: 
  In SAP SCM-APO-SPP Service Parts Planning, EOQ can be used to determine the optimal order quantity for a given item. This is done by calculating the total cost of ordering and holding inventory for different order quantities, and then selecting the order quantity that minimizes this cost. 
  
  Tips & Tricks: 
  When using EOQ in SAP SCM-APO-SPP Service Parts Planning, it is important to consider all relevant costs, such as ordering costs, holding costs, and transportation costs. Additionally, it is important to consider any constraints that may affect the optimal order quantity, such as minimum or maximum order quantities. 
  
  Related Information: 
  For more information on EOQ and how it can be used in SAP SCM-APO-SPP Service Parts Planning, please refer to the SAP Help Portal. Additionally, there are many online resources available that provide more detailed information on EOQ and its applications.