Pegging strategy versus Offsetting procedure

[swathi_rege]

PPDS experts, I have done some extensive reading on sap help for advanced planning but not able to understand the difference between these two..

Net reqs calc offsetting procedures

1. FIFO logic, Avoid delays, Avoid surplus

Dynamic pegging procedures

1. FIFO logic, use punctional/suitable receipts

To me both offsetting and pegging are used to match requirements to reciepts..not able to understand the difference between these functionalities..any insight with an figurative example please?

Just to keep the question simple..what happens differently in offsetting fifo logic versus dynamic pegging fifo logic?

[rupesh_brahmankar3 · Accepted solution]

Hello,

With pegging, suitable existing product receipts and product stocks that can cover the requirements are assigned to a product requirement. Pegging organizes the material flow using all BOM levels, from the procurement of components and raw materials to the supply of a sales order, for example.

You can use different strategies to calculate dynamic pegging

FIFO Here the system uses the earliest receipts in the pegging interval to cover a requirement, that is, first the first receipt in the pegging interval, then the second and so on. Using this strategy, surplus receipts only become available later.

For net requirements calculation and dynamic pegging there a difference please refer SAP consulting note

448960 - Net requirements calculation (documentation)

5) What are the differences between net requirements calculation and dynamic pegging?

•Dynamic pegging can assign all receipt elements to a requirement that are in the pegging area, that is, location, planning version, account assignment and so on of the receipt and requirements must agree. Furthermore, dynamic pegging takes into account the pegging interval (defined by the maximum earliness and the maximum allowed delay of the availability date as against the requirements date) and the shelf life data from the product master. For details about pegging, see note 393437.

•Unlike dynamic pegging, the net requirements calculation distinguishes between fixed and unfixed receipt elements. However, a heuristic can only change unfixed receipts; it cannot change fixed receipts. For this reason, the heuristic first allocates the requirements suitable for the fixed receipts. If all requirements can be covered by fixed receipts, the heuristic cannot delete the fixed receipts.

•The net requirements calculation does not consider the pegging interval.

If there is a requirement for a product and a fixed receipt element that is later than the maximum allowed delay in the product master, the heuristic cannot change the receipt, since it is fixed. However, the heuristic could attempt to create a new receipt element in time. If this were to succeed, the fixed receipt element would, however, be a surplus. In theory, you have the choice to accept the date violation or to produce a surplus. Heuristics accept the date violation. For this, the system generates a date alert which refers to the problem which can then be solved interactively.

Best Regards,

R.Brahmankar

[swathi_rege]

Bump for help plz