If you set a work item to repeat on a schedule, future work items will be created three items in advance of its scheduled start date. 

The exception to this rule is when the next work item in a schedule is due to begin in more than three months (eg. annual work items). In this case, the next piece of work in the schedule will be created.

The purpose for this is to prevent your work view from being over-populated with large amounts of future work items that are not be needed yet.

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