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Jan 05, 2011 at 10:47 AM
# Automatic reorder point calculation

I would like to confirm the formula for calculating a reorder point in SAP.

As I understand it, the simple formula is safety stock + average requirements * lead time.

I have the following settings for a material:

MRP Type - V2

Lot size - HB

Maximum stock level - 500

Total lead days (including GR processing) - 30

Service Level - 98%

Procurement type - F

Historical periods - 2

Forecast periods - 2

Period Indicator - M

Forecast Model - G (Moving average)

Consumption values - 12/2010 - 160

11/2010 - 190

When I execute the forecast run, the get the following result:

Basic Value - 175

MAD - 15

Safety Stock - 39

Reorder point - 219

If the formula for calculating reorder point is - 39 (safety stock) + 175 (average requirement) * (30(lead time)/30(forecast period in days), then the reorder point should be 214. Why does the system output 219?

I read somewhere that a SAP note exists for correcting the calculation, can anyone confirm?

Many thanks.