Working of Minimum Order Quantity

Hi,

Could anybody explain me the actual functionality of Minimum Order Quantity.

I am confused how it works i.e.

If MOQ is maintained for any material in master data then:

• Then if my stock level goes below it system should give me a message and warns me to create a new Purchase Order.
• Then if I create a Sales Order for that material and the order Qty is below the MOQ then system will not allow me to create order or just gives me a warning.

Please somebody suggest . Its really urgent.

Thanks

Mitasha