Operational management for Material requirement planning

1. MATERIAL REQUIREMENT PLANNING
Prepared by Mahmoud Eltaweel
1

2. What is MRP
■ Material requirements planning (MRP) is a production planning, scheduling, and
inventory control system used to manage manufacturing processes.
■ It is a material control system that attempts to keep adequate inventory levels
■ It is to assure that required materials are available wheen needed
2

3. Question 1
The following structure tree
indicates the components
needed to assemble one unit of
product “W”. Determine the
quantities of each component
needed to assemble 100 units
of W.
3
W
A (1)
9
B (2) C(4)
D(2) E
E(2) F
D (3) G(2)
D

4. Item Quantity per 1 Quantity per 1 Quantity per 100
W 1 1 100
A 1 1 100
B 2 2 200
C 4 4 400
D (2*1)+(4*3)+(1*2*4) 22 2200
E (1*1)+(2*2) 5 500
F (1*2) 2 200
G (2*4) 8 800
4
W 100
A 100 B (2*100) C(4*100)
D(2*100) E (1*100)
E(2*200) F(200)
D (3*400) G(2*400)
D (800)

5. Question 2
The following table lists the
components needed to assemble an
end item, lead times, and quantities
on hand.
■ If 20 units of the end items are to
be assembled, how many
additional units of E are needed?
■ An order for the end item is
scheduled to be shipped at the
start of week 11. What is the latest
week that an order can be started
and still be ready to ship on time
■ Draw an assembly time chart for
the process
5
Item End B C D E F G H
LT
(week)
1 2 3 3 1 2 1 2
Amount
on hand
0 10 10 25 12 30 5 0
End Items
B (2) C D
E(2) F(3)
G(2) E(2)
H(4) E(2)
(3)

6. 6
Item Gross Requirements – On Hand = Net Requirements
End Item 20 – 0 = 20
Item Gross Requirements – On Hand = Net Requirements
B (20 * 2) = 40 – 10 = 30
C (20 * 1) = 20 – 10 = 10
D (20 * 3) = 60 – 25 = 35
Item Gross Requirements – On Hand = Net Requirements
E [(30 B * 2) + (10 C * 2) + (35 D * 2)] = 150 – 12 = 138
If 20 units of the end item are to be assembled, how many additional units of E are needed?
Step 1:
Determine the gross requirements and the net requirements for the End Item:
Step 2:
Determine the gross requirements and the net requirements for B, C, & D.
Multiply the net requirements for the end item by the usage quantities of B, C, & D to determine the gross
requirements for B, C, & D.
Step 3:
Determine the gross requirements and net requirements for E.
Multiply the net requirements for B, C, & D by the usage quantities of E to determine gross requirements for E

7. To solve this, we need to determine the longest sequence through the product structure tree moving
from the end item down to the lowest items. The lead time for each item is indicated in bold to the
left of each item in the product structure tree shown below.
B) An order for the end item is scheduled to be shipped at the start of week 11. What is the latest
week that an order can be started and still be ready to ship on time
End Items
B (2) C D
E(2) F(3)
G(2) E(2)
H(4) E(2)
Item End B C D E F G H
LT
(week)
1 2 3 3 1 2 1 2
The longest sequence is 6 weeks (End Item – D – H). 11 – 6 weeks = start of week 5.
1 wk
2 wk 3 wk 3 wk
1 wk 2 wk
1 wk 1 wk
1 wk2 wk
Total LT = 4 wk 5 wk 5 wk 5 wk 6 wk 5 wk
(3)

8. 8
E
B
F
E
C END
ITEM
G
H
D
E
Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Wk 11 Wk 12
Draw an assembly time chart for the process

9. Question 3
Eighty units of end item E are needed at the
beginning of week 6 . Three cases (30 units per case)
of J have been ordered and one case is scheduled to
arrive in week 3, one in week 4 and one in week
5. Note: J must be ordered by the case and B must
be produced in multiple of 120 units.
There are 60 units of B and 20 units of J now on
hand.
Lead times are two weeks for E and B, and one week
for J
a) A prepare material requirement plan for product J
9

10. 10
MRP Schedule Item E
Item Begin
Invento
ry
Week
1
Week
2
Week
3
Week
4
Week 5 Week
6
Gross
requirement
80
Scheduled
receipts
Projected on
hand
Net
Requirements
80
Planned order
receipts
80
Planned order
release
80
Item Quantity per 1 Quantity per 80
E 1 80
B 2 160
J 3+(4*2) =11 880
F 2*2 =4 320

11. 11
MRP Schedule Item B
Item Begin
Inventory
Week
1
Week
2
Week
3
Week
4
Week 5 Week 6
Gross
requirement
160
Scheduled
receipts
Projected on
hand
60 60 60 60
Net
Requirements
100
Planned order
receipts
120
Planned order
release
120

12. 12
MRP Schedule Item J
Item Begin
Invento
ry
Week
1
Week
2
Week
3
Week
4
Week
5
Week
6
Gross
requirement
480 240
Scheduled
receipts
30 30 30
Projected on
hand
20 20 30 60 30
Net
Requirements
460 180
Planned order
receipts
480 180
Planned order
release
480 180
I need 80 from E at week 4 and 120 from B at week 2
One B requires 4 Js
One E requires 3 Js