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Chapter 13

Chapter 13. MRP: Material Requirement Planning ERP: Enterprise Resource Planning. MRP. Material requirements planning Computer-based Information System for Ordering and Scheduling of Dependent Demand Inventories. Independent and Dependent Demand.

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Chapter 13

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  1. Chapter 13 MRP: Material Requirement Planning ERP: Enterprise Resource Planning

  2. MRP Material requirements planning Computer-based Information System for Ordering and Scheduling of Dependent Demand Inventories

  3. Independent and Dependent Demand Dependent demand: Demand for items that are subassemblies or component parts to be used in production of finished goods. Independent Demand A C(2) B(4) Dependent Demand D(2) E(1) D(3) F(2)

  4. Information Flow, Processes, Data Bases MRP Inputs MRP Processing MRP Outputs Changes Order releases Master schedule Planned-order schedules Primary reports Exceptionreports Bill of materials Planning reports MRP computer programs Secondary reports Performance- control reports Inventory records Inventory transaction

  5. Inputs to MRP (1) Master schedule: Identifying (a) which end items are to be produced, (b) in what quantities, and (c) when these are needed. (2) Bill of Material : a listing of all of the raw materials, parts, subassemblies, and assemblies needed to produce one unit of a product. (3) Inventories

  6. Product Structure Tree Lead Times Bill-of-Materials Product structure tree: Visual depiction of the requirements in a bill of materials, where all components are listed by levels.

  7. Product Structure Tree

  8. Level 0 Chair Front Leg Assembly Back Assembly 1 Seat Cross bar Side Rails (2) Cross bar Back Supports (3) Legs (2) 2 3 Product Structure Tree

  9. Level 0 Chair Front Leg Assembly Back Assembly 1 Seat Cross bar Side Rails (2) Cross bar Back Supports (3) Legs (2) 2 3 Product Structure Tree

  10. Example Determine the quantities of B, C, D, E, and F to produce one unit of A Level 0 A B (2) C 1 E (2) F (2) D (3) 2 E 3 E (4)

  11. Extend Level 1 Level 0 A B(2) C 1 E (2) F (2) D (3*2) 2 E(2) 3 E (4)

  12. Extend Level 2 Level 0 A B(2) C 1 E (2) F (2) D (3*2) 2 E(2) 3 E (4*3*2)

  13. Compute the Quantities Level 0 A B(2) C 1 E (2) F (2) D (6) 2 E(2) We need B=2 C=1 D=6 E=28 F=2 3 E (24)

  14. Level 0 A(10) B (2) C 1 E (2) F (2) D (3) 2 E 3 E (4) Example Determine the quantities of these components that we need to order or assemble to satisfy demand of 10A Inventory B=4 C=10 D=8 E=60 F=0

  15. Level 0 A(10) B (20) C (10) 1 E (2) F (2) D (3) 2 E 3 E (4) Extend Level 0 Inventory B=4 C=10

  16. Level 0 A(10) B (20- 4=16) C (10-10=0) 1 E (2) F (2) D (3) 2 E 3 E (4) Level 1 Computations

  17. Level 0 A(10) B (16) C (0) 1 2 3 Extend Level 1

  18. Level 0 A(10) B (16) C (0) 1 E (2*0) F (2*0) D (3*16) 2 E(1*16) 3 E (4) Extend Level 1

  19. Level 0 A(10) B (16) C (0) 1 E (0) F (0) D (48) 2 E(16) 3 E (4) Extend Level 1 Inventory D=8 E=60 F=0

  20. Level 2 Computations Level 0 A(10) B (16) C (0) 1 E (0) F (0) D (48-8=40) 2 E(16) 3 E (4)

  21. Level 2 Computations Level 0 A(10) B (16) C (0) 1 E (0) F (0) D (40) 2 E(16) 3 E (4)

  22. Extend Level 2 Level 0 A(10) B (16) C (0) 1 E (0) F (0) D (40) 2 E(16) 3 E (4*40)

  23. Extend Level 2 Level 0 A(10) B (16) C (0) 1 E (0) F (0) D (40) 2 E(16) 3 E (160)

  24. Extend Level 2 Level 0 A(10) B (16) C (0) 1 E (0) F (0) D (40) 2 E(16) E=60 F=0 3 E (160) Inventory E=60 Requirement E = 160+16-60=116

  25. Extend Level 2 Level 0 A(10) B (16) C (0) 1 E (0) F (0) D (40) 2 E(16) 3 E (100)

  26. Procurement of raw material D Fabrication of part E Subassembly A Procurement of raw material F Final assembly and inspection Procurement of part C Procurement of part H Subassembly B Fabrication of part G Procurement of raw material I 6 7 1 2 3 4 5 8 9 10 11 Assembly Time Chart

  27. Shutter, 1 Frame (LT=2W), and 4 Wood Section (LT=1W) Frame (2, 2) Shutter Assembly (1) Wood Sections (4,1) 2 1 3

  28. Master Schedule; Lot for Lot Ordering 100 150 100 150 100 150 100 150 Shutter has two frames and four wood sections

  29. Frame; 2 per unit, LT=2 W 200 300 200 300 200 300 200 300

  30. Wood Section; 4 per unit, LT=1 W 400 600 70 70 70 70 330 600 330 600 330 600

  31. Master Schedule; Lot Size Ordering; EOQ 320, 70 140 120 120 120 120 180 320 320 320 320

  32. Lot Size Ordering: EOQ 70 20 20 50 20 20 580 350 630 350 630

  33. Level 0 A C D(3) B (2) 1 E (2) 2 F(3) G (2) E (2) E (2) H (4) Practice; Example (pp 606, P2), Units Required, Lead Times Item End B C D E F G H LT (WK) 1 2 3 3 1 2 1 2 InvOnHand 0 10 10 25 12 30 5 0 For 20 units of the end item, how many additional units of each item is required

  34. Units Required Level 0 A(20) C(1) D(3) B (2) 1 E (2) 2 F(3) G (2) E (2) E (2) H (4) Item End B C D E F G H InvOnHand 0 10 10 25 12 30 5 0

  35. Units Required Level 0 A(20) C(20) D(60) B (40) 1 E (2) 2 F(3) G (2) E (2) E (2) H (4) Item End B C D E F G H InvOnHand 0 10 10 25 12 30 5 0

  36. Units Required Level 0 A(20) C(20-10) D(60-25) B (40-10) 1 E (2) 2 F(3) G (2) E (2) E (2) H (4)

  37. Units Required Level 0 A(20) C(10) D(35) B (30) 1 E (2) 2 F(3) G (2) E (2) E (2) H (4)

  38. Units Required Level 0 A(10) C(10) D(35) B (30) 1 E (2*30) 2 F(3*30) G (2*10) E (2*35) E (2*10) H (4*35)

  39. Units Required Level 0 A(10) C(10) D(35) B (30) 1 E (60) 2 F(90) G (20) E (70) E (20) H (140) Item E F G H InvOnHand 12 30 5 0

  40. Units Required Level 0 A(10) C(10) D(35) B (30) 1 E (60-12) 2 F(90-30) G (20-5) E (70) E (20) H (140)

  41. Units Required Level 0 A(10) C(10) D(35) B (30) 1 E (48) 2 F(60) G (15) E (70) E (20) H (140) Item End B C D E F G H Required 20 30 10 35 138 60 15 140

  42. Example (pp 673, P2); Lead Times A(1) Item End B C D E F G H LT (WK) 1 2 3 3 1 2 1 2 Required 20 30 10 35 138 60 15 140

  43. Lead Times A(1) C D B Item B C D E F G H LT (WK) 2 3 3 1 2 1 2 Required 30 10 35 138 60 15 140

  44. Lead Times A(1) C(3) D(3) B (2)

  45. Lead Times A(1) C(3) D(3) B (2) E F G E H E Item E F G H LT (WK) 1 2 1 2 Required 138 60 15 140

  46. Lead Times A(1) C(3) D(3) B (2) E (1) F(2) G (1) E (1) H (2) E (1)

  47. Lead Times A(1) C(3) D(3) B (2) E (1) F(2) G (1) E (1) H (2) E (1)

  48. Master Schedule; Lot for Lot Ordering 120 120 120 120 Part X (LT=1) is formed by three Part A (LT=1) Part A is formed by two Part B (LT=2)

  49. Part A; 3 per unit, LT=1 W 360 60 60 60 60 300 300 300

  50. Part B; 5 per unit, LT=2 W 360 60 60 60 60 300 300 300 600 100 100 100 100 500 500 500

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