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Mrp

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  • 1. A T E R I A L E Q U I R E M E N T S L A N N I N G
  • 2. E(1) Independent vs. Dependent Demand Independent Demand (Demand for the final end- product or demand not related to other items) Dependent Demand (Derived demand items for component parts, subassemblies, raw materials, etc) Finished product Component parts
  • 3. DEFINITION Material Requirements Planning (MRP) • A computer-based information system that translates the finished product requirements of the master schedule into time-phased requirements for subassemblies, component parts and raw materials, working backward from the due date using lead times.
  • 4. MRP is designed to answer questions: WHAT HOW MUCH WHEN IT
  • 5. OVERVIEW OF MRP MRP Inputs MRP Outputs Master Schedule Bill of Materials Inventory Records
  • 6. MRP INPUTS • Referred to as the master production schedule • States which end items are to be produced, when they are needed, and in what quantities • These quantities come from different sources: -Customer orders -Forecasts -Order from warehouses The Master Schedule Go back to OVERVIEW OF MRP
  • 7. • Contains a listing of all of the assemblies, subassemblies, parts and raw materials that are needed to produce one unit of a finished product • Listing is hierarchical The Bill of Materials
  • 8. BOM: Product Structure Tree
  • 9. BOM: Indented BOM Level 0 Level 1 Level 2 Chair Leg Assembly Legs (2) Cross bar Seat Back Assembly Side Rails (2) Cross bar Back supports (3)
  • 10. • Stored information on the status of each item by time period called time buckets • Gross requirements • Scheduled receipts • Expected amount on hand • Supplier • Lead time • Lot size policy Inventory Records
  • 11. MRP Processing Terms in spreadsheet Period Beg. Inventory 1 2 3 4 Quantity Component LT Beg. Inventory 1 2 3 4 Gross Requirements Scheduled Receipts Projected on hand Net Requirements Planned-order receipts Planned-order releases Total expected demand for an item or raw material in a time period Open orders scheduled to arrive from vendors or elsewhere in the pipeline Expected amount of inventory that will be on hand at the beginning of each period Actual amount needed in each time period Quantity expected to be received by the beginning of the period which it is shown indicates timing of receipts of quantities Planned amount to order in each time period; planned-order receipts offset by lead time
  • 12. Net requirements = Gross requirements – Available inventory Available inventory = Projected on hand – Safety stock – Inventory allocated to other items Net requirements = Gross requirements – Projected on-hand inventory
  • 13. MRP OUTPUTS 1. Planned orders • Schedule indicating the amount and timing of future orders 2. Order releases • Authorization for the execution of planned orders 3. Changes • Revisions of due dates or order quantities of cancellations of orders
  • 14. Other Considerations  Safety Stock  Lot Sizing - Choosing of a lot size for ordering or production • Lot-for-lot ordering • Lot size ordering
  • 15. BENEFITS AND REQUIREMENTS OF MRP BENEFITS 1. Low work-in-process inventories. 2. Provides a better picture of material requirements. 3. Provides a better handle on needed capacities at all process centers. 4. Provides a better means of allocating production time. 5. Ability to easily determine inventory usage by backflushing.
  • 16. BENEFITS AND REQUIREMENTS OF MRP REQUIREMENTS 1. Computer and software. 2. Accurate and current - Master Production Schedule - Bills of Materials - Inventory records. 3. Data Integrity.
  • 17. Backflushing • Exploding an end item’s BOM to determine the quantities of the components that were used to make the item
  • 18. Example 1 Product X is made of two units of Y and three of Z. Y is made of one unit of A and two units of B. Z is made of two units of A and four units of C. Lead time for X is one week; Y, two weeks; Z, three weeks; A, two weeks; B, one week; and C, three weeks. a.Draw the bill of materials (product structure tree) b.If 100 units of X are needed in week 10, develop a planning schedule showing when each item should be ordered and in what quantity.
  • 19. X Y (2) A (1) B (2) Z (3) A (2) C (4) Solution: a.
  • 20. 3 4 5 6 7 8 9 10 X LT = 1 100 100 Y LT = 2 200 200 Z LT = 3 300 300 A LT = 2 600 200 600 200 B LT = 1 400 400 C LT = 3 1200 1200 •Solution: b.
  • 21. Example 2 A(2) B(1) D(5)C(2) X C(3) Item On-Hand Lead Time (Weeks) X 50 2 A 75 3 B 25 1 C 10 2 D 20 2 Requirements include 95 units (80 firm orders and 15 forecast) of X in week 10
  • 22. A(2) X Day: 1 2 3 4 5 6 7 8 9 10 X Gross requirements 95 LT=2 Scheduled receipts Proj. avail. balance 50 50 50 50 50 50 50 50 50 50 On- Net requirements 45 hand Planned order receipt 45 50 Planner order release 45 A Gross requirements 90 LT=3 Scheduled receipts Proj. avail. balance 75 75 75 75 75 75 75 75 On- Net requirements 15 hand Planned order receipt 15 75 Planner order release 15 B Gross requirements 45 LT=1 Scheduled receipts Proj. avail. balance 25 25 25 25 25 25 25 25 On- Net requirements 20 hand Planned order receipt 20 25 Planner order release 20 C Gross requirements 45 40 LT=2 Scheduled receipts Proj. avail. balance 10 10 10 10 10 On- Net requirements 35 40 hand Planned order receipt 35 40 10 Planner order release 35 40 D Gross requirements 100 LT=2 Scheduled receipts Proj. avail. balance 20 20 20 20 20 20 20 On- Net requirements 80 hand Planned order receipt 80 20 Planner order release 80 It takes 2 A’s for each X
  • 23. Day: 1 2 3 4 5 6 7 8 9 10 X Gross requirements 95 LT=2 Scheduled receipts Proj. avail. balance 50 50 50 50 50 50 50 50 50 50 On- Net requirements 45 hand Planned order receipt 45 50 Planner order release 45 A Gross requirements 90 LT=3 Scheduled receipts Proj. avail. balance 75 75 75 75 75 75 75 75 On- Net requirements 15 hand Planned order receipt 15 75 Planner order release 15 B Gross requirements 45 LT=1 Scheduled receipts Proj. avail. balance 25 25 25 25 25 25 25 25 On- Net requirements 20 hand Planned order receipt 20 25 Planner order release 20 C Gross requirements 45 40 LT=2 Scheduled receipts Proj. avail. balance 10 10 10 10 10 On- Net requirements 35 40 hand Planned order receipt 35 40 10 Planner order release 35 40 D Gross requirements 100 LT=2 Scheduled receipts Proj. avail. balance 20 20 20 20 20 20 20 On- Net requirements 80 hand Planned order receipt 80 20 Planner order release 80 B(1)A(2) X It takes 1 B for each X
  • 24. A(2) B(1) X C(3) Day: 1 2 3 4 5 6 7 8 9 10 X Gross requirements 95 LT=2 Scheduled receipts Proj. avail. balance 50 50 50 50 50 50 50 50 50 50 On- Net requirements 45 hand Planned order receipt 45 50 Planner order release 45 A Gross requirements 90 LT=3 Scheduled receipts Proj. avail. balance 75 75 75 75 75 75 75 75 On- Net requirements 15 hand Planned order receipt 15 75 Planner order release 15 B Gross requirements 45 LT=1 Scheduled receipts Proj. avail. balance 25 25 25 25 25 25 25 25 On- Net requirements 20 hand Planned order receipt 20 25 Planner order release 20 C Gross requirements 45 40 LT=2 Scheduled receipts Proj. avail. balance 10 10 10 10 10 On- Net requirements 35 40 hand Planned order receipt 35 40 10 Planner order release 35 40 D Gross requirements 100 LT=2 Scheduled receipts Proj. avail. balance 20 20 20 20 20 20 20 On- Net requirements 80 hand Planned order receipt 80 20 Planner order release 80 It takes 3 C’s for each A
  • 25. A(2) B(1) C(2) X C(3) Day: 1 2 3 4 5 6 7 8 9 10 X Gross requirements 95 LT=2 Scheduled receipts Proj. avail. balance 50 50 50 50 50 50 50 50 50 50 On- Net requirements 45 hand Planned order receipt 45 50 Planner order release 45 A Gross requirements 90 LT=3 Scheduled receipts Proj. avail. balance 75 75 75 75 75 75 75 75 On- Net requirements 15 hand Planned order receipt 15 75 Planner order release 15 B Gross requirements 45 LT=1 Scheduled receipts Proj. avail. balance 25 25 25 25 25 25 25 25 On- Net requirements 20 hand Planned order receipt 20 25 Planner order release 20 C Gross requirements 45 40 LT=2 Scheduled receipts Proj. avail. balance 10 10 10 10 10 On- Net requirements 35 40 hand Planned order receipt 35 40 10 Planner order release 35 40 D Gross requirements 100 LT=2 Scheduled receipts Proj. avail. balance 20 20 20 20 20 20 20 On- Net requirements 80 hand Planned order receipt 80 20 Planner order release 80 It takes 2 C’s for each B
  • 26. A(2) B(1) D(5)C(2) X C(3) Day: 1 2 3 4 5 6 7 8 9 10 X Gross requirements 95 LT=2 Scheduled receipts Proj. avail. balance 50 50 50 50 50 50 50 50 50 50 On- Net requirements 45 hand Planned order receipt 45 50 Planner order release 45 A Gross requirements 90 LT=3 Scheduled receipts Proj. avail. balance 75 75 75 75 75 75 75 75 On- Net requirements 15 hand Planned order receipt 15 75 Planner order release 15 B Gross requirements 45 LT=1 Scheduled receipts Proj. avail. balance 25 25 25 25 25 25 25 25 On- Net requirements 20 hand Planned order receipt 20 25 Planner order release 20 C Gross requirements 45 40 LT=2 Scheduled receipts Proj. avail. balance 10 10 10 10 10 On- Net requirements 35 40 hand Planned order receipt 35 40 10 Planner order release 35 40 D Gross requirements 100 LT=2 Scheduled receipts Proj. avail. balance 20 20 20 20 20 20 20 On- Net requirements 80 hand Planned order receipt 80 20 Planner order release 80 It takes 5 D’s for each B

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