Mrp
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20-Oct-2014 -
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Transcript of Mrp
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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
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.
MRP is designed to answer questions:
WHAT HOW MUCH
WHEN IT
OVERVIEW OF MRP
MRP Inputs MRP Outputs
Master Schedule
Bill of Materials
Inventory Records
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
• 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
BOM: Product Structure Tree
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)
• 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
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
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
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
Other Considerations
Safety Stock Lot Sizing - Choosing of a lot size for ordering or production
• Lot-for-lot ordering
• Lot size ordering
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.
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.
Backflushing
• Exploding an end item’s BOM to determine the quantities of the components that were used to make the item
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.
X
Y (2)
A (1) B (2)
Z (3)
A (2) C (4)
Solution: a.
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.
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
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
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
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
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
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