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Chapter 15 Resource Requirements Planning: MRP and CRP Overview Resource Requirements Planning Material Requirements Planning (MRP) Capacity Requirements Planning (CRP) Wrap-Up: What World-Class Companies Do Resource Requirements Planning Material Requirements Planning (MRP) Materials Requirements Planning (MRP) Computer based system Explodes Master Schedule (MPS) into required amounts of raw materials and subassemblies to support MPS Nets against current orders and inventories to develop production and purchased material ordering schedules Objectives of MRP Improve customer service Reduce inventory investment Improve plant operating efficiency Elements of MRP MRP Computer Program Begins with number of end items needed Add service parts not included in MPS Explode MPS into gross requirements by consulting bill of materials file Modify gross requirements to get net requirements: Net Requirements = Gross Requirements + Allocated Inventory + Safety Stock - Inventory On Hand Offset orders to allow for lead time Outputs of MRP Planned order schedule - quantity of material to be ordered in each time period Changes to planned orders - modifications to previous planned orders Secondary outputs: Exception reports Performance reports Planning reports Example: MRP Schedule LocoMopeds is a manufacturer of off-road mopeds. The following product structure diagram represents the bill of materials for its dual-carburetor Model 442 moped. Example: MRP Schedule Bill of Material Parent Component Level Compon. Code Code Code Description Req’d 442 0 #442 Moped 442 EA 1 Engine Assem. 1 GT 1 Gas Tank 1 WA 1 Wheel Assem. 2 F 1 Frame 1 EA M 2 Motor 1 C 2 Carburetor 2 WA HA 2 Hub Assem. 1 T 2 Tire 1 Example: MRP Schedule Inventory Status Report Example: MRP Schedule The company is currently planning production for weeks 10 through 16. Based on existing orders and demand forecasts, the master production schedule is as follows: