Groff Reorder Procedure 

Use

The Groff reorder procedure is based on the fact that additional storage costs are equal to the saving in lot size independent costs according to the classical lot sizing formula for the minimum costs. Additional storage costs resulting from an increase in the lot size are, therefore, compared with the resulting savings in lot size independent costs.

Prerequisites

In the material master (MRP 1 view) for the material, you have set the indicator for GR for Groff reorder procedure in the Lot size field and the Lot size independent costs and storage costs indicator.

Features

Starting from a certain period, the system keeps grouping requirements into a lot until the increase in the average storage costs per period is larger than the decrease in the lot size independent costs per period.

Example

Price:

$ 20

Lot size independent costs:

$ 100

Storage cost percentage:

10 %

The most appropriate lot size is 1000 pieces because for a further requirement of 1000 pieces, additional storage costs would then exceed the savings in lot size independent costs.