chap 017
DESCRIPTION
lot sizeTRANSCRIPT
F O U R T H E D I T I O N
Inventory Systems forDependent Demand
© The McGraw-Hill Companies, Inc., 2003
chapter 17
DAVIS
AQUILANO
CHASE
PowerPointPresentation
byCharlieCook
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–2
Chapter ObjectivesChapter ObjectivesChapter ObjectivesChapter Objectives
• Explain the changing role of materials requirements planning (MRP) within a manufacturing organization.
• Discuss the role of MRP within an enterprise resource planning (ERP) system.
• Introduce the fundamental concepts and calculations that drive an MRP system.
• Define the various elements that make up an MRP system.
• Demonstrate how MRP-related systems are used in service operations.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–3
Chapter Objectives (cont’d)Chapter Objectives (cont’d)Chapter Objectives (cont’d)Chapter Objectives (cont’d)
• Recognize that MRP and JIT can be used together within an organization.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–4
Master Production ScheduleMaster Production ScheduleMaster Production ScheduleMaster Production Schedule
• Master Production Schedule (MPS)–A time-phased production plan that specifies
how many of, and when to build, each end item.
• Material Requirements Planning–Determines the number of subassemblies,
components, and raw materials required and their build dates to complete a given number of end products by a specific date.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–5
The Role of MRP withinThe Role of MRP withinthe Manufacturing Functionthe Manufacturing Function
The Role of MRP withinThe Role of MRP withinthe Manufacturing Functionthe Manufacturing Function
Exhibit 17.1Exhibit 17.1
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–6
The Role of MRP within an ERP SystemThe Role of MRP within an ERP SystemThe Role of MRP within an ERP SystemThe Role of MRP within an ERP System
Exhibit 17.2Exhibit 17.2
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–7
Master Production ScheduleMaster Production ScheduleMaster Production ScheduleMaster Production Schedule
• Time Fences–Periods of time with each period having some
specified level of opportunity for the customer to make changes.
–Frozen• Make no or only insignificant changes to products.
–Moderately firm• Allow some changes in specific products.
–Flexible• Allow almost any variation in products.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–8
Integrating MRP and JIT into the Supply Integrating MRP and JIT into the Supply ChainChain
Integrating MRP and JIT into the Supply Integrating MRP and JIT into the Supply ChainChain
Exhibit 17.3Exhibit 17.3
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–9
Master Production Schedule Time FencesMaster Production Schedule Time FencesMaster Production Schedule Time FencesMaster Production Schedule Time Fences
Exhibit 17.4Exhibit 17.4
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–10
Material Requirements Planning Material Requirements Planning (MRP) Systems(MRP) Systems
Material Requirements Planning Material Requirements Planning (MRP) Systems(MRP) Systems
• Materials Requirements Planning System–Creates requirements and schedules identifying
the parts, components, and materials necessary to produce the end products specified in the MPS.
–Links inventory and scheduling systems.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–11
Purposes, Objectives, and Purposes, Objectives, and Philosophy Philosophy
of MRPof MRP
Purposes, Objectives, and Purposes, Objectives, and Philosophy Philosophy
of MRPof MRP• Inventory Control
–Order the right part in the right quantity at the right time.
• Assign Operating Priorities–Order with the right due date and keep the due
date valid.
• Capacity–Plan for a complete and accurate load.–Plan for an adequate time to view future load.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–12
Inventory Management Under MRPInventory Management Under MRPInventory Management Under MRPInventory Management Under MRP
• Theme–Getting the right materials to the right place at
the right time.
• Objectives–Improve customer service.–Minimize inventory investment.–Maximize production operating efficiency.
• Philosophy–Expedite materials if overall production.
schedule will be delayed.–De-expedite materials if schedule falls behind.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–13
Benefits of an MRP SystemBenefits of an MRP SystemBenefits of an MRP SystemBenefits of an MRP System
• More competitive pricing• Lower selling price• Lower inventory levels• Improved customer service• Faster response to market demands• Increased flexibility to change the master
schedule• Reduced setup and tear-down costs• Reduced idle time
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–14
Industry Application and Expected ResultsIndustry Application and Expected ResultsIndustry Application and Expected ResultsIndustry Application and Expected Results
Exhibit 17.5Exhibit 17.5
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–15
MRP System StructureMRP System StructureMRP System StructureMRP System Structure
• Demand for Products–Available-to-promise–Demand for spare parts and supplies
• Bill of Material (BOM) File–A list of subassemblies, components, and raw
materials, and their respective quantities required to produce specific end items
–Also, product structure or product tree file
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–16
MRP System StructureMRP System StructureMRP System StructureMRP System Structure
• Inventory Records File–Computerized record-keeping system for the
inventory status of all subassemblies, components, and raw materials.
–Peg record file (also “where-used file”)–Inventory transaction file
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–17
Overall View of the Inputs to a Standard MRP Program Overall View of the Inputs to a Standard MRP Program and the Reports Generated by the Programand the Reports Generated by the Program
Overall View of the Inputs to a Standard MRP Program Overall View of the Inputs to a Standard MRP Program and the Reports Generated by the Programand the Reports Generated by the Program
Exhibit 17.6Exhibit 17.6
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–18
Product Structure Tree for Product AProduct Structure Tree for Product AProduct Structure Tree for Product AProduct Structure Tree for Product A
Exhibit 17.7Exhibit 17.7
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–19
Subassemblies and Parts List in an Subassemblies and Parts List in an Indented Format and in a Single-Level ListIndented Format and in a Single-Level List
Subassemblies and Parts List in an Subassemblies and Parts List in an Indented Format and in a Single-Level ListIndented Format and in a Single-Level List
Exhibit 17.8Exhibit 17.8
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–20
Part L Hierarchy in (a) Expanded to Part L Hierarchy in (a) Expanded to the Lowest Level of Each Item in (b)the Lowest Level of Each Item in (b)Part L Hierarchy in (a) Expanded to Part L Hierarchy in (a) Expanded to the Lowest Level of Each Item in (b)the Lowest Level of Each Item in (b)
Exhibit 17.9Exhibit 17.9
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–21
The Inventory Status RecordThe Inventory Status Recordfor an Item in Inventoryfor an Item in Inventory
The Inventory Status RecordThe Inventory Status Recordfor an Item in Inventoryfor an Item in Inventory
Exhibit 17.10Exhibit 17.10
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–22
MRP Computer ProgramMRP Computer ProgramMRP Computer ProgramMRP Computer Program
• Output Reports–Primary reports
• Planned orders
• Order release notices
• Changes in due dates
• Cancellations or suspensions of open orders
• Inventory status data
–Secondary reports• Planning reports
• Performance reports
• Exceptions reports
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–23
Product Structure Tree for Product TProduct Structure Tree for Product TProduct Structure Tree for Product TProduct Structure Tree for Product T
Exhibit 17.11Exhibit 17.11
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–24
Materials Materials Requirements Requirements
Plan for Plan for CompletingCompleting100 units of 100 units of Product T in Product T in
Period 8Period 8
Materials Materials Requirements Requirements
Plan for Plan for CompletingCompleting100 units of 100 units of Product T in Product T in
Period 8Period 8
Exhibit 17.12Exhibit 17.12
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–25
The Environment of the Master SchedulerThe Environment of the Master SchedulerThe Environment of the Master SchedulerThe Environment of the Master Scheduler
Exhibit 17.13Exhibit 17.13
Source: Romeyn C. Everdell and Woodrow W. Chamberlain, “Master Scheduling in a Multi-Plant Environment,” Proceedings of the American Production and Inventory Control Society (1980), p. 421.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–26
The Aggregate Plan and the MasterThe Aggregate Plan and the MasterProduction Schedule for MattressesProduction Schedule for MattressesThe Aggregate Plan and the MasterThe Aggregate Plan and the MasterProduction Schedule for MattressesProduction Schedule for Mattresses
Exhibit 17.14Exhibit 17.14
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–27
CRP: Workload for Work CenterCRP: Workload for Work CenterCRP: Workload for Work CenterCRP: Workload for Work Center
Exhibit 17.15Exhibit 17.15
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–28
Scheduled Workload for Work Center AScheduled Workload for Work Center AScheduled Workload for Work Center AScheduled Workload for Work Center A
Exhibit 17.16Exhibit 17.16
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–29
Manufacturing Resource Planning Manufacturing Resource Planning (MRP II)(MRP II)
Manufacturing Resource Planning Manufacturing Resource Planning (MRP II)(MRP II)
• MRP II–Advanced MRP system that takes into
consideration the equipment capacities and other resources associated with a manufacturing facility.
• Sales and Operations Planning (S&OP)–Extends MRP by aligning customer demand with
both in-house and supplier resources.
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–30
Lot Sizing in MRP SystemsLot Sizing in MRP SystemsLot Sizing in MRP SystemsLot Sizing in MRP Systems
• Lot Sizing–Lot sizes are the part quantities issued in the
planned order receipt and the planned order release sections of an MRP schedule.
• Lot-Sizing Techniques–Lot-for-lot–Economic order quantity (EOQ)–Least total costs–Least unit cost
Fundamentals of Operations Management 4e © The McGraw-Hill Companies, Inc., 2003 17–31
Lot-for-Lot Method of Determining Lot-for-Lot Method of Determining Production QuantitiesProduction Quantities
Lot-for-Lot Method of Determining Lot-for-Lot Method of Determining Production QuantitiesProduction Quantities
Exhibit 17.17Exhibit 17.17