Prelude Production Introductory Exercise: Material ...echange-cipe.com/English/Exercices/mrp.pdf · Prelude Production Introductory Exercise: Material requirements planning Christian

Prelude Production

Introductory Exercise:Material requirements

planning

Christian van DELFT - Groupe HEC1

1 19 April 1999

Introductory Exercise : Material Requirements Planning - 2 -

Objective of this exerciseThis exercise presents the main principles of MRP and some functions ofthe Planning menu of Prelude Production.

The technical data (items, bills of materials, work centers, routings, etc.)have already been entered in the folders and therefore additional data entryis kept to a minimum.

Starting Prelude ProductionTo run the program, click on the Prelude Production icon. The programmay take several seconds to load.

Click on the OK button in the introductory window to open the fileselection window. This window lets you define the folder that will containthe data files you will work on.


Click on the Create a directory button and enter MRP.

Then, click on the Restore button and confirm the procedure. Select theMRP1.ppz folder

and confirm with the OK button. Click twice on the OK button to confirmthe reference date that is the (imaginary) date on which PreludeProduction is used. Then click on the YES button. Now you have accessto the different functions of Prelude Production.


The MRP problem under studyThe P&P factory is organised as a production-to-stock system. P&Pproduces two finished products, PF1 and PF2. These products needsubassemblies (S1 and S2) and parts end raw material (A1, A2, A3)supplied by another factory. The corresponding bills of materials areshown below,

In Prelude Production, these bills of materials can be accessed via the Billsof materials function (Data menu). By selecting Item S1 (via the Searchbutton) and by clicking on the button,

you access the following product structure tree presentation window :


By clicking on the Structure Maintenance button, in the Bill ofMaterials Maintenance window, you find the amount of materials forproducing an S1 unit. These amounts are described in the sequences #001and #002 of the BOM Structure Maintenance window of the parentitem S1 :


The mean lead time for producing (or ordering) a batch is equal to 10days. This lead time appears when selecting the Parameters panel in theItem Maintenance window (via the Items function, Data menu),

Now, let’s consider the Bill of Materials window (via the Bills ofmaterials function, Data menu) for a given item, PF1 for example :


By clicking on the button you access a graphical representation ofthe lead times as follows :


Work centers and routings

In the factory production operations are performed by two assembly lines :one is dedicated to the production of S1 and S2 and the other concentrateson the final assembly of PF1 and PF2. These work centers can be viewed,via the Work Centers function (Data menu). The correspondingdescription windows are as follows :

Now, as the production resources are known, the operation times and theroutings can be defined. These data are to be found in the RoutingMaintenance window (accessed via the Data menu, Routings function),



By clicking on the button you get more details, as shownbelow :


Items and routingsFor each item, the routings to use are defined in the Routings panel in theItem Maintenance window (accessed by the Items function, Data menu),as shown below :


Forecasts, inventories and master schedulesAs P&P is organized as a production-to-stock system, the master scheduleis computed on the basis of sales forecasts (and not on the basis of firmorders). The master schedule for PF1 and PF2 for the considered planninghorizon is as follows (in units)

Period 01/05/96 01/12/96 01/19/96 01/26/96 02/02/96 02/09/96 02/16/96 02/23/96

PF1 40 60

PF2 10 20 30

Period 03/01/96 03/08/96 03/15/96 03/22/96 03/29/96 04/05/96 04/12/96 04/19/96

PF1 50 70

PF2 10 20 30 20 30

These forecasts can be found using the Sales Forecast Maintenance andSales Forecast List functions (Planning menu) :


Note that these forecasts are automatically taken into acount in theMaster Schedule windows. As a matter of fact, by clicking on the MasterSchedules function (Planning menu), you access the following MasterSchedule windows, which include the forecast values :


For this example, we assume that at the outset there is inventory for someitems (S1 : 150 units, S2 : 150 units, A3 : 500 units). This inventory isshown in the Master Schedule window (Master Schedules function,Planning menu),


or in the Inventory by Item window (Inventory by Item function,Inventories menu)


Material Requirements PlanningOur initial assumption is that no particular constraint is set on purchasingand production. All the items have therefore the same parameters (i.e. netrequirements as reorder policy and Daily requirements as lot sizing rule),which can be checked via the Items function (Data menu), by choosingthe Parameters panel :

The MRP procedure can be started by clicking on the MaterialRequirements Planning function (Planning menu), typing the final dateof the planning horizon (i.e. : 06011996) and clicking on the OK button.The window shown below is, displayed on your screen :

Then click on the OK button. The MRP procedure computes thepurchasing orders and the production orders for the problem. These orders


are accessed by clicking on the Planned W.O. List function (Planningmenu) and on the Planned R.O. List function (Purchasing menu) :

As a first example, let’s consider the information in Planned Work Order #00000001(via the Planned Work Orders function, Planning menu) :


Via the selection of the Components panel, the window below isdisplayed on your screen,

As a second example, let’s consider the following Planned RequisitionOrder (via the Planned Requisition Orders function, Purchasing menu):



Material Requirements Planning and InventoriesAfter the computation of the orders by the MRP procedure, you can viewfuture inventory profiles. To do that, go to the Master Schedule window,by clicking on the function Master Schedules (Planning menu),

Then click on the Profile button. The following inventory profile windowsare displayed :



Material Requirements Planning and WorkloadsThe workloads associated with the production orders can be computed bythe function Infinite Capacity Scheduling (Planning menu), typing thefinal date of the planning horizon (i.e.: 06011996) and clicking on the OKbutton. The window shown below is displayed on your screen :

Use the Periods and Type commands in the Workload Profile window(Planning menu) to show the associated workloads. The windowscorresponding to the monthly, weekly and daily loads for the work center930, are as follows :


Use the Periods and Type commands in the Workload Profile window(Planning menu) to show the associated workcenter utilizations. Thewindows corresponding to the monthly, weekly and daily utilizations forthe work center 930, are as follows :




Effects of rules and parameters in the MRP procedure

Lot sizing rulesWe will now examine the implications of different lotsizing rules for theMRP computation. By clicking on the Parameters panel in the ItemMaintenance window (via the Items function, Data menu), you accessthe following Item Maintenance window. As shown below, five LotSizing Rules are proposed. These rules enable you to control the numberof orders by defining order aggregation strategies :

Let’s start by considering the basic Lot Sizing Rule, called Dailyrequirements. In the MRP1 folder, the different items are managedaccordingly to this rule.



Then click on the OK button. The MRP procedure computes thepurchasing orders and the production orders for the problem. These ordersare accessed by clicking on the Planned W.O. List function (Planningmenu) and on the Planned R.O. List function (Purchasing menu) :


It can easily be seen that there is a large number of orders, as for eachrequirement a specific order is created.

By choosing a Monthy requirements Lot Sizing Rule, the situation iscompletely different as the MRP procedure aggregates the forecastrequirements on a monthly basis. This reduces the number of orders tomanage, but at the same time increases inventory, as some requirementsare produced in advance due to the aggregation process.

This case corresponds to the folder MRP2.ppz. In order to load this folder,click on the Change folder function in the File menu.Then, click on theRestore button and confirm the procedure. Select the MRP2.ppz folder

and confirm with the OK button. Click twice on the OK button to confirmthe reference date that is the (imaginary) date on which Prelude


Production is used. Then click on the YES button. Now you have accessto the different functions of Prelude Production.

Click again on the OK button to confirm the reference date that is the(imaginary) date on which the program is used. Then click on the YESbutton.

By clicking on the Parameters panel in the Item Maintenance window(via the Items function, Data menu), we obtain the following ItemMaintenance window. As shown below, the Monthly requirements rulehas been chosen for the different items :



The MRP procedure computes the purchasing orders and the productionorders for the problem. These orders are accessed by clicking on thePlanned W.O. List function (Planning menu) and on the Planned R.O.List function (Purchasing menu) :

It can be easily seen that the number of orders has been reduced. After thecomputation of the orders by the MRP procedure, you can view futureinventory profiles. To do that, go to the Master Schedule window, byclicking on the function Master Schedules (Planning menu),





The safety stock effectLet’s consider the PF1 example. By clicking on the Parameters panel inthe Item Maintenance window (via the Items function, Data menu), weaccess the following Item Maintenance window. As shown below, theMonthly requirements rule has again been chosen :

We have seen in previous simulations that if the safety stock is equal tozero, the monthly master schedule is as shown below (accessed by clickingon the Master Schedules function, Planning menu),



The remaining analysis corresponds to the folder MRP3.ppz. In order toload this folder, click on the Change folder function in the Filemenu.Then, click on the Restore button and confirm the procedure. Selectthe MRP3.ppz folder


and confirm with the OK button. Click twice on the OK button to confirmthe reference date that is the (imaginary) date on which PreludeProduction is used. Then click on the YES button. Now you have accessto the different functions of Prelude Production.

Click again on the OK button to confirm the reference date that is the(imaginary) date on which the program is used. Then click on the YESbutton.

In MRP3 folder, the safety stock level for item PF1 has been set to 100units, as shown below via the Parameters button in the ItemMaintenance window (via the Data menu, Items function),



The monthly master schedule is shown below (accessed by clicking on theMaster Schedules function, Planning menu) :

By clicking on the Profile button, you access the associated InventoryProfile window,


The minimum batch effectLet’s consider the PF2 example. By clicking on the Parameters panel inthe Item Maintenance window (via the Items function, Data menu), weobtain the following Item Maintenance window. As shown below, aminimum batch equal to 100 units has been defined :

The MRP procedure can be started by clicking on the MaterialRequirements Planning function (Planning menu), typing the final dateof the planning horizon (i.e. : 06011996) and clicking on the OK button.The window shown below is displayed on your screen :


The monthly master schedule is the following (accessed by clicking on theMaster Schedules function, Planning menu),

By clicking on the Profile button, you access the associated InventoryProfile window,


The multiple quantity effectLet’s assume that component A3 has to be ordered in lots of 1000 units.This rule appears in the Item Maintenance window (Items function,Data menu) where the rule is defined in the Multiple Quantity field.

The MRP procedure can be started by clicking on the MaterialRequirements Planning function (Planning menu), typing the final dateof the planning horizon (i.e. : 06011996) and clicking on the OK button.The window shown below is displayed on your screen :


The monthly master schedule is the following (accessed by clicking on theMaster Schedule function, Planning menu),

By clicking on the Profile button, you get the associated inventory profilewindows,



Planned to firm orders conversionIf the planned orders are considered as satisfactory, they can be convertedinto firm orders (which are not modified anymore by the MRP procedure).

First, launch the function Infinite Capacity Scheduling (Planningmenu), enter 06011996 as final date of the planning horizon and click onthe OK button. The window shown below is displayed on your screen :

Some orders cannot be scheduled.

Then convert the work orders via the function Planned to firm W.O.Conversion (Planning menu). Enter 06011996 as Planned Work OrderConversion End Date and click on the OK button,

Some orders cannot be converted.

Then, access the firm orders via the Firm W.O. List function(Scheduling menu). The following window is displayed on your screen:


Then convert the purchase orders via the function Planned to firm R.O.Conversion (Purchasing menu). Enter 06011996 as Planned RequisitionOrder Conversion End Date and click on the OK button,

Then, access the firm orders via the Firm R.O. List function(Purchasing menu). The following window is displayed on your screen:


Prelude Production Introductory Exercise: Material ...echange-cipe.com/English/Exercices/mrp.pdf · Prelude Production Introductory Exercise: Material requirements planning Christian

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