Chap 014 The Core

8/17/2019 Chap 014 The Core

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Chapter 14

Material Requirements Planning

Copyright © 2010 by The McGraw-Hill Companies, Inc. ll rights reser!e". McGraw-Hill#Irwin


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Learning Objectives

• Describe what MRP is and where it is

best applied.

• Understand the source of the

information used b the sstem.

• Demonstrate how to do an MRP

!e"plosion.#

• $"plain how order quantities are

calculated in MRP sstems.


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Enterprise Resource Planning (ERP) andMaterial Requirements Planning (MRP)

• Enterprise resource planning &$RP'( acomputer sstem that integrates applicationprograms in accounting) sales) manufacturing)and the other functions in a firm

• Materials requirements planning &MRP'( ameans for determining the number of parts)components) and materials needed toproduce a product

* MRP pro+ides time scheduling informationspecifing when each of the materials) parts) andcomponents should be ordered or produced

* Dependent demand dri+es MRP


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Operations and Supply IntegrationOvervie


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Master Production Sc!eduling

• he master schedule deals with end items

and is a maor input to the MRP process

• /ll production sstems ha+e limited capacit

and limited resources * he aggregate plan pro+ides the general range of

operation) the master scheduler must specif

e"actl what is to be produced

•

o determine an acceptable feasible scheduleto be released to the shop) trial master

production schedules are run through the

MRP program


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"!e #ggregate Plan and t!e MasterProduction Sc!edule $or Mattresses


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"ime %ences


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&!ere MRP 'an e sed


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Material Requirements Planning SystemStructure


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ill o$ Materials

• 5ill of materials &56M'( contains thecomplete product description) listing thematerials) parts) and components along

with the sequence in which the productis created * 6ne of the three main inputs to the MRP

program

• 6ften called the product structure file orproduct tree because it shows how aproduct is put together


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ill o$ Materials (Product Structure "ree)$or Product #


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ills o$ Materials 'ontinued

• Modular bill o$ materials( a buildable

item that can be produced and stoc7ed

as a subassembl

• Super bill o$ materials( includes items

with fractional options


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Level 'oding o$ ills o$ Materials


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"!e Inventory Status Record $or an Itemin Inventory


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MRP E*plosion Process

1. he requirements for end items are

retrie+ed from the master schedule

• hese are referred to as !gross

requirements# b the MRP program

2. Uses on-hand balance with schedule of

orders to calculate the !net

requirements#

%. Using net requirements) it calculates

when orders should be recei+ed to

meet these requirements


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MRP E*plosion Process 'ontinued

4. 8ind a schedule for when orders are actuallreleased

• o account for lead time

,. Mo+e to le+el 1 items0. 9ross requirements for each le+el 1 item are

calculated from the planned-order releaseschedule for the parents of each le+el 1 item

. :et requirements) planned-order receipts)and planned-order releases are calculatedas described in steps 2*4

. Repeat for all items in bill of materials


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#n E*ample sing MRP

• /mpere) ;nc.) produces a line of electric

meters installed in residential buildings

• Meters are of two basic tpes for different

+oltage and amperage ranges *


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%uture Requirements $or Meters # and and Subassembly +


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# Master Sc!edule to Satis$y +emandRequirements

=e are con+erting monthl demand on=e are con+erting monthl demand on

the last slide to wee7s where it will bethe last slide to wee7s where it will be

producedproduced

1) > 2,1) > 2,?o+ers month?o+ers month


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Product Structure $or Meters # and


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,umber o$ nits on -and and Lead "ime+ata


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Material Requirements Planning Sc!edule $orMeters # and . and Subassemblies ' and +


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E*ample /01/2 +emand and +ata


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3-/4560

=ee7

1 2 % 4 , 0

9ross requirements %4 % 41 4, 4 4 4 4


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=ee7

1 2 % 4 , 0

9ross requirements 14 1%4 144 1,, 1%4 14 141 14,


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Lig!t Soc8et

=ee7

1 2 % 4 , 0

9ross requirements 0 4 2


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Lot Si9ing in MRP Systems

• Determination of lot si@es in an MRP sstem

is a complicated and difficult problem

• Lot si9es( the part quantities issued in the

planned order receipt and planned orderrelease sections of an MRP schedule

• =ill loo7 at four

1. Aot-for-lot &A4A'

2. $conomic order quantit &$6B'%. Aeast total cost &A?'

4. Aeast unit cost &AU?'


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Lot4$or4Lot

•


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Lot4$or4Lot Run Si9e $or an MRP Sc!edule


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Economic Order :uantity

• ?alculate reorder quantit based on

$6B

• $6B was not designed for a sstem

with discrete time periods such as MRP

• he lot si@es generated b $6B do not

alwas co+er the entire number of

periods


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Economic Order :uantity Run Si9e $or anMRP Sc!edule


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Least "otal 'ost Run Si9e $or an MRPSc!edule


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Least nit 'ost

• Least unit cost met!od( a dnamic

lot-si@ing technique that adds ordering

and in+entor carring cost for each

trial lot si@e and di+ides b the numberof units in each lot si@e) pic7ing the lot

si@e with the lowest unit cost


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Least nit 'ost Run Si9e $or an MRPSc!edule

Chap 014 The Core

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