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# Planning strategy explanation with example

Feb 27, 2017 at 11:01 AM

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Hello Team

I know there are lots of thread are available and very well explained the strategies but I wants the scenario which can be easily understand. for strategy 10 and 40.

e.g. if I have stock 20 PIR 40 and Sales order 50 then how these strategy works.

Br, Kiran

RAJA SEKHARA REDDY BANNURU Feb 28, 2017 at 06:24 AM
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Hi Kiran

Let us take your 2nd case

Stock = 20 >> PIR = 40 >> and the Sales Order Qty = 20 then how will the system behave in this case.

Net Requirement = ( Requirement - Stock) = ( 40 - 20) = 20.
Here, your Sales Order Quantity is only 20 . so it will reduce the existing PIR Quantity from 40 to 20.
Now, if you run the MRP, System will create the Planned Order, for the Quantity equal to the Net Requirement( Also considers the Lot Size maintained as explained earlier) ( For Example : Lot Size = EX : Lot for Lot)

Result : Planned Order Quantity = 20 & Reduction of PIRs from 40 to 20

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Thank Raja Sekhara

For the quick feedback and great explanation.

Hello Raja Sekhara

So in CASE I (Sales Order Qty = 50> PIR = 40 Qty.)

so in above case When PIR is consumed fully, warehouse stock is fully consumed by delivery.

where as in CASE II (Sales Order Qty = 20<PIR = 40 Qty.)

Since PIR is NOT consumed fully by sales order, warehouse stock is increased by remaining quantity.

So here the total final stock is 40 QTY, out of which 20 QTY will be delivered to SO qty and remaining 20 QTY will be there as in inventory stock.

Br, Kiran

Kiran Unde

Hi Kiran

Yes, Your understanding is Correct. This is the Standard System behavior.

If all done, please close the thread. Thanks & Regards : Raja Sekhara Reddy B

RAJA SEKHARA REDDY BANNURU Feb 27, 2017 at 12:41 PM
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Hi
Please find the below Table , with the basic differences, between Strategy 10 & 40 ( in the last attachement)

With the scenario (or) Example mentioned :

e.g. if I have stock 20 PIR 40 and Sales order 50 then how these strategy works.

With Strategy : 10
Stock = 20 >> PIR = 40 >> Net Requirement = ( Requirement - Stock)>> ( 40-20) = 20. Sales Order Qty = 50. ( This has no significance)Once Run the MRP, then the System will create the Planned Order for the Net Requirement = 20 , based on the Lot Size maintained, in the Material Master( For Example, if the Lot Size = EX (Lot for Lot).
PIR, will get reduced during the Delivery of the Sales Order

With Strategy : 40
Stock = 20 >> PIR = 40 >> Net Requirement = ( Requirement - Stock)>> ( 50-20) = 30. Sales Order Qty = 50. (This has significance here) . The Independent Requirements of 40, will get consumed by the Incoming Sales Order Qty : 50 ( Also, depends on the Consumption Mode & Consumption period maintained)
Once Run the MRP, then the System will create the Planned Order for the Net Requirement = 30 , based on the Lot Size maintained, in the Material Master( if the Lot Size is EX = ( Lot for Lot)

Please find the attached screen shots of this scenario Results

Kindly check & let me know, for any other details/assistance required

Many Thanks for your quick feedback. Best regards : Raja Sekhara Reddy B

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Kiran Unde Feb 28, 2017 at 05:39 AM
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Thanks You Very Much Raja Sekhara

Its a very well explained and my doubts with these strategies are now cleared.

one more last question I have what will happened in strategy 40 if the

Stock = 20 >> PIR = 40 >> and the Sales Order Qty = 20 then how will the system behave in this case.

actually I forgot to mentioned above CASE it will great help if you explained this case too.

Once again thank you very much.

Br, Kiran

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Kiran Unde Feb 28, 2017 at 05:45 AM
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Hello Raja Sekhara

Even I wants to check this scenario in IDEAS system but unfortunately while releasing the order the costing errors are coming.

so please explain the above case as well.

Br, Kiran

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