•Dependent demand•lumpy

MRP

DETAILED SCHEDULE FOR RAW MATERIALS

&

COMPONENTS

USED IN THE END PRODUCTS

MASTER SCHEDULE

FOR END ITEMS

TIME

Avg.rate ofdemand

Inv.LEVEL

TIME

Inv.LEVEL

t1t2 t3 t4 t5 t6

Ordering Lead Time:(for purchased parts)

Initiation of purchase requisition

Receipt of item from vendor(off shelf / fabricate)

Manufacturing Lead Time:

Place order Item deliveredProcess part through sequence of machines as given on route sheet (operation + non-productive times)

C1 C2 C3 Cn

P1 P2 P3 PN

BASIC RAW MATERIAL

COMPONENTS

PRODUCTS

Gross & Net requirements report

Capacity vsLoad report

Shop floorPlanningreport

Production OrderStatus & exceptionsreport

ServiceParts

requirements

Salesforecasts

Customerorders

Inventorytransactions

MasterProductionschedule

Engg.changes

InventoryRecord

file

MRPPROCESSOR

Bill ofMaterials

file

OUT PUTREPORTS

…

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

Demand for individual component Parts (for repair and service)

Firms customer orders

Forecasted demand

Week no 6 7 8 9 10

Product P1 50 100

Product P2 70 80 25

Etc.

C1 C2 C3 C4 C5 C6

S1 S2

P1

(1) (2)

(1) (4) (1) (2) (2) (1)

Level 0(product)

Level 1(sub-assemblies)

Level 2(raw materials)

OrderingLead time

ManufacturingLead time

Purchasingrecords

ProcessRoutesheets

C1 C2 C3 C4 C5 C6

S1 S2

P1

(1) (2)

(1) (4) (1) (2) (2) (1)C4 C6 C7 C2 C8

S3 S4

P2

(1) (1)

(1) (4) (2) (2) (1)

M4

PRODUCT STRUCTURE FOR PRODUCTS P1 & P2Initial inventory status for M4

Assembly Manufacturing Ordering

P1 = 1

P2 = 1

S2 = 1

S3 = 1

C4 = 2 M4 = 3

Lead times (in weeks)

PLANNED ORDER RELEASES

NET REQUIREMENTS

90ON HAND

40SCHEDULED RECEIPTS

GROSS REQUIREMENTS

ITEM RAW MATERIAL M4

654321PERIOD

50

EVOLUTION OF MRP

Manufacturing ResourcePlanning

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

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

Improved computational efficiency of computers

Unrealistic M/c schedules, ignoring plant capacities

Not only plans priorities but provides feedback to executing the priority plan

AN IMPROVED ORDERING METHOD

PRIORITY PLANNING

CLOSED LOOP MRP

MRP II