Material Requirements Planning

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MASTER SCHEDULE FOR

END ITEMS

MRP
DETAILED SCHEDULE FOR
RAW MATERIALS Dependent demand lumpy & COMPONENTS

USED IN THE END PRODUCTS

Avg. rate of demand Inv. LEVEL TIME

Inv. LEVEL

t1 t2

t3 t4 t5
TIME

t6

Ordering Lead Time: (for purchased parts)


Initiation of purchase requisition Receipt of item from vendor (off shelf / fabricate)

Manufacturing Lead Time:


Process part through sequence of machines as given on route sheet (operation + non-productive times)

Place order

Item delivered

BASIC RAW MATERIAL COMPONENTS

C1

C2

C3

Cn

PRODUCTS

P1

P2

P3

PN

Customer orders

Sales forecasts

Service Parts requirements

Engg. changes

Master Production schedule

Inventory transactions

Bill of Materials file

MRP PROCESSOR

Inventory Record file

OUT PUT REPORTS Gross & Net requirements report Capacity vs Load report Shop floor Planning report Production Order Status & exceptions report

Week no Product P1 Product P2 Etc.

8 50

10 100

70

80

25

DEMAND
Often excluded from MPS, since it does not include end product demand.

Firms customer orders Forecasted demand Demand for individual component Parts (for repair and service)

Level 0 (product)

P1 S1 C1
(1) (1)

Level 1 (sub-assemblies)

S2 C3 C4
(1) (2)

(2)

Level 2 (raw materials)

C2
(4)

C5
(2)

C6
(1)

Ordering Lead time Manufacturing Lead time

Purchasing records Process Route sheets

P1 S1(1) S2(2) S3(1)

P2 S4(1)

C4 C6 C7 C2 C8 C1 C2 C3 C4 C5 C6 (2) (1) (1) (4) (1) (2) (2) (1) (1) (4) (2) M4 PRODUCT STRUCTURE FOR PRODUCTS P1 & P2
Initial inventory status for M4
PERIOD ITEM RAW MATERIAL M4 GROSS REQUIREMENTS SCHEDULED RECEIPTS ON HAND NET REQUIREMENTS PLANNED ORDER RELEASES 50 40 90 1 2 3 4 5 6

Lead times (in weeks)


Assembly P1 = 1 P2 = 1 S2 = 1 S3 = 1 Manufacturing C4 = 2 Ordering M4 = 3

EVOLUTION OF MRP
Improved computational efficiency of computers

AN IMPROVED ORDERING METHOD PRIORITY PLANNING CLOSED LOOP MRP MRP II


Manufacturing Resource Planning

Unrealistic M/c schedules, ignoring plant capacities Not only plans priorities but provides feedback to executing the priority plan

(Links functions -Capacity planning -Inventory management -Shop floor control -MRP)

Links up the closed loop MRP system with the financial systems of the company

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