material requirements planning: role in the mpc system evolution in material planning
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1
Session 10Material Requirements Planning
http://www.pom.edu/mpc/lectures_in_manufacturing_planning.htmlecture session 10
• Material Requirements Planning: Role in the MPC System
• Evolution in Material Planning
• Basic MRP of Record Processing
• Information Timing
• Technical Issues
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Manufacturing Planning and Control System
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Evolution in Material Planning
• Independent vs. Dependent Demand Items
• MRP
• Closed loop MRP systems
• MRP II (Manufacturing Resource Planning)
• ERP
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Basic MRP Records and Record Processing: Example
Develop an MRP spreadsheet record for six periods using the following parameters for the item:
Period 1 2 3 4 5 6
Gross requirements 20 20 20 30 30 30Lead time 1 periodLot size 40 unitsSafety stock 0 unitsInventory 2 unitsScheduled receipt 40 units in period 1
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Basic MRP Records and Record Processing: Example (Continued)
a. In what periods are there planned order releases?b. What happens to the timing, number of planned
order releases, and average inventory (for periods l through 6) if 10 units of safety stock are required?
c. What happens to the timing, number of planned order releases, and average inventory (for periods 1 through 6) if a one-period safety lead time is used instead of the safety stock?
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Basic MRP Records and Record Processing
a. No safety stock
Three planned orders in periods 2, 3, and 5. Average projected inventory is 15.33 units.
1 2 3 4 5 620 20 20 30 30 3040
Projected Available Balance 2 22 2 22 32 2 1240 40 40
Q = 40, LT = 1, SS = 0
PeriodGross RequirementsScheduled Receipts
Planned Order Release
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Information Timing
Gross Requirements - Beginning of Period
Scheduled Receipts - Beginning of Period
Projected Available Balance - End of Period
Planned Order Release - Beginning of Period
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Basic MRP Records and Record Processing (Continued)
b. Safety stock of 10 units
Q = 40, LT = 1, SS = 10Three planned orders in periods 1, 3, and 4. Two planned orders were moved up because of the safety stock requirement. Average projected inventory is 28.67 units.
1 2 3 4 5 620 20 20 30 30 3040
Projected Available Balance 2 22 42 22 32 42 1240 40 40
PeriodGross RequirementsScheduled Receipts
Planned Order Release
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Basic MRP Records and Record Processing
a. No safety stock
Three planned orders in periods 2, 3, and 5. Average projected inventory is 15.33 units.
1 2 3 4 5 620 20 20 30 30 3040
Projected Available Balance 2 22 2 22 32 2 1240 40 40
Q = 40, LT = 1, SS = 0
PeriodGross RequirementsScheduled Receipts
Planned Order Release
10
Basic MRP Records and Record Processing (Continued)
c. Safety Lead Time of 1 period
Three planned orders in periods 1, 2, and 4. All of the planned orders were moved up by 1 period to account for the safety lead time. Average projected inventory is 35.33 units.
Using safety stocks or safety lead time causes the system to hold more inventory and order earlier. The safety lead time causes all orders to be held an extra period in inventory
1 2 3 4 5 620 20 20 30 30 3040
Projected Available Balance 2 22 42 62 32 42 1240 40 40
Q = 40, LT = 1, SS = 0, SLT = 1 period
PeriodGross RequirementsScheduled Receipts
Planned Order Release
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Technical Issues
• Net Requirements• Lot Sizing
– Lot-For-Lot (L4L)– Fixed Order Quantities (Q)
• Safety Stock and Safety Lead Time• Incorporating Service Part Demand• Scheduled Receipts versus Planned Order
Releases• Firm Planned Orders
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