MBA.782.Mat'l.Reqm'ts.Pl anning CAJ9.14.1 • Material Requirements Planning (MRP) • MRP Logic and Product Structure Trees • Time Fences • MRP Example • MRP II • Lot Sizing in MRP Programs • Benefits of MRP Programs Operations Management Material Requirements Planning
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MBA.782.Mat'l.Reqm'ts.PlanningCAJ9.14.1 Material Requirements Planning (MRP) MRP Logic and Product Structure Trees Time Fences MRP Example MRP II Lot Sizing.
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MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.1
• Material Requirements Planning (MRP)
• MRP Logic and Product Structure Trees
• Time Fences
• MRP Example
• MRP II
• Lot Sizing in MRP Programs
• Benefits of MRP Programs
Operations Management
Material Requirements Planning
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.2
Forecast &Firm Orders
MaterialRequirements
Planning
AggregateProductionPlanning
MasterProductionScheduling
Purchase Orders &Shop Floor Schedules
CapacityRequirements
Planning
M. R. P.
The Planning Hierarchy
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.3
• Materials requirements planning (MRP) is the
_________ for determining the number of parts,
components, and materials needed to produce a
product.
• MRP provides time ________________ information
specifying when each of the materials, parts, and
components should be ordered or produced.
• _____________ demand drives MRP.
• MRP is a ______________ system.
M. R. P.
M.R.P. - Defined
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.4
• Independent Demand– Requirements that are ____ related to the demands for
any other product
– Products that face the demand of the _____________– Demand must be ___________
• Dependent Demand
– __________ on demand of a finished good
– Demands can be ____________– ordering in lots or batches, thus “ _______ ”
M. R. P.
Types of Demand
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.5
• What is “Lumpy” demand
– results from need to have all components available ________ a production run begins
– Lumpy demand items are manufactured / ordered in a ____ - ________ manner
– “time phasing”
> not replenished when inventory level is low
> is replenished when ___________
M. R. P.
Demand Patterns
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.6
• The goal of MRP is getting “the right materials to the right place at the right time.”
• Based on a master production schedule, a material requirements planning system:
– Creates schedules identifying the _____________ parts and materials required to produce end items.
– Determines ________ unit numbers needed.
– Determines the _________ when orders for those materials should be released, based on lead times.
-- Release Orders-- Change due dates-- Other warnings
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.8
• Time-phased plan specifying ____ ______ and
______ the firm plans to build each end item
Aggregate Plan(Product Groups)
MPS(Specific End Items)
Inputs to M.R.P.
Master Production Schedule (MPS)
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.9
Inputs to M.R.P.
Master Production Schedule
Production Plan:
Month
Days per Month
Plan Totals:
Master Production Schedule
Week 14 15 16 17 18 19 20 21
Ladder-back Chair 20 20 20 20
Kitchen Chair 30 30 30 30 35 35 35 35
Desk Chair 20 20 20 20
Sub-Totals: 50 50 50 50 55 55 55 55
Totals:
May
22
220
200 220
April
20
200
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.10
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.11
• Part number
– Stock-Keeping-Unit ( _____ )> refers to a given part number at a given _________.
• Captures ______ data about each SKU, including:
– Quantity on hand
– Quantity on order and when delivery is expected
– Lead time
– Ordering Policies
– Other management data, e.g. part name, description, cost
Inputs to M.R.P.
Inventory Record
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.12
• A list of components and quantities needed
to make _____ assembly
– each component has a unique part number
• Provides product structure (tree)
– Parents: Items _______ given level
– Children: Items _______ given level
– A purchased item has ___ children
• Shows low-level coding
– Lowest level in structure item occurs
– Top level is 0; next level is 1 etc.
Inputs to M. R. P.
Bill of Materials
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.13
Lead time: The time from when an order is placed until
the part is _______ for use
Offsetting: Placing the requirements in their _________ time periods based on lead time
Exploding: Multiplying the parent requirements by the
usage ___________ through the product tree
A LT = 3 Wk
P LT = 7 Wk I LT = 4 Wk
C LT = 8 Wk S LT = 6 Wk
Bill of Materials
Lead Times, Exploding, and Offsetting
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.14
TimeWeeks
5 10 15 20
R = WK 10
R = WK 17
R = WK 5
R = WK 13
R = WK 7
F = WK 17
F = WK 20
F = WK 13
F = WK 17
F = WK 13
Component part #P
Component part #C
Component part #S
Subassembly part #I
Final assembly item #A
Order for final assembly, item #A, due in week 20:R = ReleaseF = Finish
Bill of Materials
Backward SchedulingA LT = 3 Wk
P LT = 7 Wk I LT = 4 Wk
C LT = 8 Wk S LT = 6 Wk
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.15
Problem 4.1
Number of Gs needed?
Purchased components?
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.16
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.17
• Gross Requirements
– the ________ demand derived from all parents at the MPS level and lower levels
• Scheduled Receipts
– total units that are on order, but _____ yet received.
• Projected on-hand inventory (for a planning period)
(aka. _________ __________ _____)
= On-hand Amount (from the previous period)+ Scheduled Receipts + Planned Order Receipts- Gross Requirements
M.R.P. Worksheet
Elements of Worksheet
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.18
• Net requirements
– If the Projected on-hand inventory (PAB)
is ______ than the Safety Stock,
then.....
Net Requirement = Safety Stock - PAB,
otherwise
Net Requirement = 0
M.R.P. Worksheet
Elements of Worksheet
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.19
• Planned Order Receipt
– how much we need to put on order to _______ at the beginning of this planning period
• Planned Order Release
– when we need to ________ the order considering the delay of lead time
M.R.P. Worksheet
Elements of Worksheet
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.20
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.21
Problem 4.2
• Given the following product tree, explode, offset, and calculate the gross and net requirements. All lead times and the quantities required are shown in parenthesis. The master production schedule calls for 70 J’s in week 7. There is a scheduled receipt of 50 K’s in week 3. There are 20 J’s, 100 L’s, and 200 N’s on hand.
J LT = 1 wk
K(2) LT = 2 wk L(1) LT = 1 wk
M(2) LT = 2 wk N(3) LT = 1 wk
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.22
Problem 4.2{Insert mba782mrpworksheetho.xls”APICS BSCM Prob. 4.2(c)” here}
MBA.782.Mat'l.Reqm'ts.Planning CAJ9.14.23
Problem 4.2
• An item is available at the __________ of the period
• Proj. Avail. Balance is at the _____ of the period
• Planned order release becomes the gross requirement