Three groups of Lot-sizing procedures are available:
- Static lot-sizing procedures
- Period lot-sizing procedures
- Optimum lot-sizing procedures
I will explain here about one of the Optimum lot-sizing procedures: Least unit cost procedure (WI).
Feature
Starting from the shortage date, successive requirements are grouped together to form lots until total costs per unit reach a minumum level. The total cost are equal to the sum of the lot size independent costs plus the total storage costs.
Prerequisite
- Lot size field (MRP 1 view) is set with WI for Least unit cost procedure.
- Lot size independent costs (MRP 1 view) and storage costs indicator (MRP 1 view) is set.
Ordering costs is 100 in this sample.
Storage costs percentage for storage cost indicator 1 of plant 1000 is 10% in this sample. It is maintained in customizing OMI4.
- Price is set. It depends on price control. If price control is V, the price is "Moving price"; if price control is S, the price is "Standard price".
Price is 20 in this sample.
- Requirements exist. In this sample, there are 4 planned independent requirements (PIRs). They are with date 2015/2/6, 2015/2/13, 2015/2/20 and 2015/2/27.
Calculation Logic
Calculation result of this sample.
| Requirement Date | Requirement qty | Lot Size | Lot Size Ind. Cost | Storage Cost | Total Cost | Unit Cost |
|---|---|---|---|---|---|---|
| 2015/2/6 | 1000 | 1000 | 100 | 0 | 100 | 0.100 |
| 2015/2/13 | 1000 | 2000 | 38.36 | 138.36 | 0.069 | |
| 2015/2/20 | 1000 | 3000 | 76.71 | 215.07 | 0.072 | |
| 2015/2/27 | 1000 | 4000 | 115.07 | 330.14 | 0.083 |
Since the Unit cost for Lot Size 2000 is minimum, requirements are grouped together to form lots with qty 2000.
Formula
- Lot size = current Lot Size + new requirement qty.
- Storage Cost = ( Requirement * Price * Storage Cost Percentage * Time in shortage ) / ( 100 * 365)
- Total Cost = current Total Cost + Newly calculated Storage Cost
- Unit Cost = Total Cost / Lot Size
Explaination
On 2015/2/6, shortage occurs.
Time in shortage is 0 days.
Storage cost = 0.
Total cost = storage cost 0 + Lot size ind. cost 100 = 100
Unit cost = Total cost 100 / Lot size 1000 = 0.100
On 2015/2/13
Time in shortage is 7 days.
Storage cost = (requirement qty 1000 * price 20 * percentage 10 * Time in shortage 7 ) / (100 * 365) = 38.36
Total cost = storage cost 38.36 + current total cost 100 = 138.36
Unit cost = Total cost 138.36 / Lot size 2000 = 0.069
On 2015/2/20
Time in shortage is 14 days.
Storage cost = (requirement qty 1000 * price 20 * percentage 10 * Time in shortage 14 ) / (100 * 365) = 76.71
Total cost = storage cost 76.71 + current total cost 138.36 = 215.07
Unit cost = Total cost 215.07 / Lot size 3000 = 0.072
On 2015/2/27
Time in shortage is 21 days.
Storage cost = (requirement qty 100 * price 20 * percentage 10 * Time in shortage 21 ) / (100 * 365) = 115.07
Total cost = strorage cost 115.07 + current total cost 215.07 = 330.14
Unit cost = Total cost 330.14 / Lot size 4000 = 0.083
Source Code
See attached text file.