What is lot-size-based consolidation in SAP SCM-IBP-RM - Response?

SAP Term: lot-size-based consolidation

• Component: SCM-IBP-RM

• Component Name: Response

• Description: An algorithm of the OBP planning engine that changes the pegging of orders that have to meet lot sizes. This way, fewer orders are used to satisfy the demands and less surplus is produced. For example, the planning engine could satisfy two demands of 50 each with two orders that each have to meet the minimum lot size of 100. However, the planning engine instead creates one order of 100 and satisfies both demands with this one order.

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• Key Concepts: 
  Lot-size-based consolidation is a feature of SAP's Supply Chain Management (SCM) Inventory and Planning (IBP) and Replenishment Management (RM) modules. It allows users to consolidate multiple orders into one order based on the lot size of the items being ordered. This helps to reduce costs and improve efficiency by reducing the number of orders that need to be processed. 
  
  How to use it: 
  To use lot-size-based consolidation, users must first define the lot size for each item in the order. This can be done in the SCM-IBP-RM module by selecting the item and entering the desired lot size. Once this is done, users can then select multiple orders and consolidate them into one order based on the lot size of each item. 
  
  Tips & Tricks: 
  When using lot-size-based consolidation, it is important to ensure that the lot size for each item is set correctly. This will help to ensure that orders are consolidated in an efficient manner and that costs are minimized. 
  
  Related Information: 
  For more information on lot-size-based consolidation, please refer to SAP's official documentation on SCM-IBP-RM.