Requirement Quantity Optimization

During automatic replenishment planning, the system optimizes the requirement quantities after requirement quantity calculation. The FRP run generates optimized order proposals in accordance with your optimization settings. In this process, among other things, SAP F&R optimizes your net requirements to enable the use of logistical order units or reduce overall costs.

Implementation Considerations

To carry out requirement quantity optimization, you must have defined the necessary profiles and group settings according to your business needs. For more information, see:
You can deactivate individual optimizing steps in Customizing. For more information, see Profile for Requirement Quantity Optimization.

You configure some of the profiles and group settings listed above – such as the capital lockup profile and the restriction profile – in Customizing, and the rest in the application.

Note
You can assign the defined profiles in the master data. SAP provides a standard reference profile (with the exception of the order balancing profile) that you can either adopt unchanged or copy and modify under another name. If you do not assign a different profile in the master data, the system uses the standard profile.

End of the note.

You can run optimization for specific products and order proposals. Net demand rounding and capital lockup optimization are product-specific; the restriction checks are order-proposal-specific. Order balancing optimization can be product-specific or product group-specific.

Integration

With the exception of rounding, SAP F&R only applies requirement quantity optimization during automatic planning. You can check compliance with the restrictions and round the order proposal quantities in manual planning, but you cannot perform any other optimization steps.
Rounding
SAP F&R first applies rounding to the demands of all demand periods. In the later optimization steps, it checks whether it should add the rounded requirements for the order proposal quantity to the demands from the first requirements period.

You can perform rounding for order proposal items that were created manually and automatically. If rounding causes automatic planning to exceeds the maximum stock, you can generate an exception and (through soft and hard limits) control whether or not you want to allow the maximum stock to be exceeded.

You can activate manual rounding with a toolbar button in the Replenishment Workbench and the Product Workbench. The Rounding Status column for order proposal items shows you whether and how SAP F&R rounded a given item.
During requirement quantity optimization, SAP F&R considers hard and soft limits that are derived from the parameters in the location product's master data. This limits may prevent optimization by the system based on vendor restrictions, economic order quantity, or order balancing because it cannot fill up an order proposal with demands from future demand periods (after the first period).
- Soft limit
  The order proposal quantity can only exceed a soft limit if this is needed to cover the demand of the first demand period. Soft limits are derived from the following parameters:
  - Minimum shelf life
  - Maximum target range of coverage
  - Maximum stock
    The value for maximum stock is stored in the master data for the location product. You can define whether this parameter should be a hard or soft limit in the requirement calculation profile. The maximum stock is configured as a stock limit in the default settings. For more information, see the Implementation Guide (IMG) for Forecasting and Replenishment under Forecasting and Replenishment Processor Maintain Requirement Calculation Profiles .
  If the demand from the first demand period exceeds the soft limit, the system optimizes demand such that the demand only covers the first demand period, but does not use any other demand periods for fillup.
- Hard limit
  The order proposal quantity must comply with this limit, which is derived from the following parameters:
  - Stock at end of the listing period (requirement calculation profile)
    
    The discontinuation date is stored in the master data for the location product.
  - Maximum stock (see above)
  In this case, the system trims the requirement quantity in accordance with the limit and does not fill up any further. It does so even if the order proposal quantity can no longer cover demand from the first demand period.
Example
Example of how the system uses the maximum stock limit:

The threshold value is 200 pieces and demand from the first demand period is 300 pieces. If a soft limit is defined, SAP F&R calculates a proposed order quantity of 300 pieces. If the hard limit is used, however, only 200 pieces are calculated.

End of the example.

Note
The calculation details and the rounding log show which limit the system used and why. For more information, see General Functions in the OPM Workbenches.

End of the note.
The following graphic shows the integration of requirement quantity optimization in the automatic replenishment process:

Note Note

Optimization to an additional restriction can override the result of an order balancing optimization.

End of the note.

Features

Product-Specific Optimization

You can use the following profiles and group settings together with a product (or, if an order balancing profile is involved, with a product group):

Unit of Measure Groups

For more information, see Determination of Units of Measure for Rounding or Ordering.
Rounding Profiles

Capital Lockup Profiles
Order Balancing Profiles and Order Balancing Groups
You can run order balancing optimization at either the product or product group level.

Order-Proposal-Specific Optimization

You can use the Restriction Profile with reference to an order proposal. For more information, see Restriction Check During Automatic Replenishment Planning.

Constraints

The system does not perform capital lockup optimization, the restriction check, or order balancing during manual planning (for order proposals that you create manually in the Replenishment Workbench or Product Workbench).