Chapter 18Materials Requirements Planning.ppt

Chapter 18Materials Requirements Planning Material Requirements Planning (MRP) Bill of Material MRP Logic and Calculations Lot Sizes, Safety Stock and Time Fences MRP II MRP Management Issues Material Requirements PlanningDefined Materials requirements planning (MRP) is the logic for determining the number of parts, components, and materials needed to produce a product. MRP provides time scheduling information specifying when each of the materials, parts, and components should be ordered or produced. Dependent demand drives MRP. Material Requirements Planning System Based on a master production schedule, a material requirements planning system: Creates schedules identifying the specific parts and materials required to produce end items. Determines exact unit numbers needed. Determines the dates when orders for those materials should be released, based on lead times. MRP Input:Bill-of-Material List of components quantities needed to make product Provides product structure (tree) Parents Children Shows low-level coding Lowest level in structure item occurs Top level is 0; next level is 1 etc. Bill-of-Material Product Structure Tree Product Structure Thinking Challenge The demand for product A is 50. How many of each component is needed to satisfy demand? Product Structure Solution Lead Times Product Structure MRP Scheduling Terminology Gross Requirements: demand for an item from: independent demand independent demand dependent demand MRP Scheduling Terminology Scheduled receipts – orders that have already been released (i.e., an open order) and that are scheduled to arrive at the beginning of the period. Projected available balance (On-hand) – amount of inventory at the beginning of a period MRP Scheduling Terminology Net requirements – Planned order receipt – Planned order release – MRP Formulas NRt = GRt - OHt – SRt (0 if negative) OHt = OHt-1 + SRt-1 + POReceiptt-1 – GRt-1 – SS MRP Example - One item’s complete recordStarting information MR