SAP reorder point VS safety stock

5 pts.
Tags:
SAP
What are the pros and cons of reorder point VS safety stock in SAP
1

Answer Wiki

Thanks. We'll let you know when a new response is added.

Safety stock is a measurement of reserve stock to protect empty stock and reorder point is a level of inventory to take action for stock. 

There are a few types of MRP planning (MRP types) under the more general concept of consumption based planning. The more automated one is when the system calculates by itself the reorder point and the safety stock (VM).

For the system to be able to doing this, you must define and run material forecast before. System is using the results of it for these calculations.

Basicaly, ROP is calculated as the forecast basic value * by the lead time, to which safety stock is added. Safety stock is calculated based on the forecast variance.

Discuss This Question: 1  Reply

 
There was an error processing your information. Please try again later.
Thanks. We'll let you know when a new response is added.
Send me notifications when members answer or reply to this question.
  • Subhendu Sen
    Safety stock is the quantity of stock to satisfy high requirements in the stocking-up period. The purpose of the safety stock is to prevent material shortage. The safety stock is included in the reorder level. While Reorder level means, if the stock falls below its minimum level, the system flags the material for requirements planning by creating a planning file entry based on the configuration. The reorder point is important only for reorder point planning. Depending on the above, you can easily understand pros/cons of the both.
    140,850 pointsBadges:
    report

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to:

To follow this tag...

There was an error processing your information. Please try again later.

Thanks! We'll email you when relevant content is added and updated.

Following

Share this item with your network: