set an MRP type for MRP in the material master (MRP 1 view).

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Process Flow

1. The system calculates net requirements for all the requirement quantities that are to be planned. The system thereby compares available warehouse stock or the scheduled receipts from Purchasing and Production with planned independent requirements, material reservations and incoming sales orders. In the case of a material shortage, that is, if the available stock (including firmed receipts) is smaller than the quantity required, the system creates procurement proposals.
2. The system calculates the quantity recorded in the procurement proposal according to the lot-sizing procedure that you specified in the material master. Various lot-sizing procedures are supported by the system. You can define a lot-sizing procedure for each individual material.
3. The procurement proposal is also scheduled which means that, for materials procured externally, the delivery and release dates are determined, and for materials produced in-house, the production dates are calculated.
4. For materials produced in-house, the dependent requirements of the components are determined during the BOM explosion. For each component, the dependent requirements date is displaced by the in-house production time of the higher-level material.
5. (unplanned goods issues, excess consumption of components in production, and so on) can be covered by using the materials forecast within MRP. The historical values of unplanned requirements form the basis of the forecast. These requirements are then taken into account along with the exact requirement quantities.