MRP at King Furniture - Operations Management

1. OPERATIONS MANAGEMENT
PROJECT ON
Material Requirement Plan (MRP) at King Furniture
Presented by
Murtaza Mannan (19BSP1631)

2. Introduction
King Furniture PVT LTD (King Furniture), founded in 1982, is one of the leading manufacturer of
furniture including chairs and components in South India. It serves all across India and is popular
for its quality, innovative and aesthetic designs and prompt delivery. Although the company has
tie-ups with many corporate demand, the demand for its chairs is not regular. Hence the
company decided to develop a material requirement planning for producing chairs over a 12
week period, given the lead time, 2 weeks. Below is the demand estimated by the company
within the 12 week period. Current Inventory in stock is 300.
200
90
225
1000
75
250
100
0
200
400
600
800
1000
1200
Week 1 Week 3 Week 5 Week 7 Week 8 Week 11 Week 12

3. Material Requirement Planning (MRP)
It refers to a system for calculating the materials and components needed to manufacture
a product, with an attempt to keep adequate inventory levels.
Three Steps
Identifying the Demand/sales Forecast
Taking Inventory on Hand
Scheduling Production or Purchase order
In a broader sense, it specifically deals with the control and management of inventories
Functions
Forecasting
Reducing Waste
Scheduling

4. MRP for King Furniture
Demand On hand Production
Week 1 200 100 0
Week 2 0 100 0
Week 3 90 10 215
Week 4 0 225 0
Week 5 225 0 1000
Week 6 0 1000 75
Week 7 1000 75 0
Week 8 75 0 0
Week 9 0 0 250
Week 10 0 250 100
Week 11 250 100 0
Week 12 100 0 0
Total 1940 1640
Current Inventory (in Stock)
= 300
Lead Time – 2 Weeks
Production (Net Requirement) = Demand (Forecast) – On Hand (Inventory)