The part period balancing procedure adheres to the "classic" lot size formula for the minimum costs whereby variable costs (storage costs) are equal to the lot size independent costs.

In the material master (MRP 1 view) for the material, you have set the indicator for SP for Part period balancing in the Lot size field and the Lot size independent costs and storage costs indicator.

Starting from the shortage date, successive requirements are grouped together to form lots until the sum of the storage costs equals lot size independent costs. (In other words, this procedure involves an adjustment between costs independent of quantity and costs dependent of quantities and time.)

The most appropriate lot size is 2000 pieces because if further requirements were added to this lot, total storage costs would be larger than the lot size independent costs.