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TRANSCRIPT
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Resource PlanningResource Planning15
15 – 1Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
For For Operations Management, 9eOperations Management, 9e by by Krajewski/Ritzman/Malhotra Krajewski/Ritzman/Malhotra © 2010 Pearson Education© 2010 Pearson Education
PowerPoint Slides PowerPoint Slides by Jeff Heylby Jeff Heyl
Resource PlanningResource Planning
At the heart of any organizationSt t ith l d ti l dStarts with sales and operations plans and plans the input requirementsA process relative to the firm’s competitive priorities and an important part of managing supply chains
15 – 2Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Enterprise Resource Planning Enterprise Resource Planning
What an ERP system doesIntegrating the firm’s functional areasUsed by many different types of organizationsUsed by many different types of organizations
How ERP systems are designedSingle comprehensive databaseManagers to monitor all of the company’s products at all locations and at all timesInformation is automatically updated in the all applications when transactions occur
15 – 3Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
ppStreamlines the data flows throughout the organizationRequires a careful analysis of major processesSignificant changes in ERP systems - interoperability
Back-Office Processes Front-Office Processes
HumanData Analysis
• Product costing
Enterprise Resource Planning Enterprise Resource Planning
Resources• Benefits• Payroll
• Job costsSales and Marketing• Sales orders• Pricing system
Manufacturing• Material requirements planning
• Scheduling
ERP System
15 – 4Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Customer Service• Field service• QualitySupply-Chain
Management• Forecasting• Purchasing• Distribution
Accounting and Finance• Accounts payable and receivable
• General ledgers• Asset management
Figure 15.1 – ERP Application Modules
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MRP is a computerized information system to manage dependent demand inventory and schedule orders
Materials Requirements Planning Materials Requirements Planning
schedule ordersTranslates the master production schedule into requirements for all subassemblies, components, and raw materials through the MRP explosionDependent demand
Quantity required varies with the production plans of other items
15 – 5Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
other itemsComponentParent
Othersources
of demand
Authorizedmaster production
schedule
MRP InputsMRP Inputs
Inventorytransactions
Inventoryrecords
Bills ofmaterials
Engineeringand process
designs
Material
MRPexplosion
15 – 6Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Materialrequirements
plan
Figure 15.2 – Material Requirements Plan Inputs
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Demand PatternsDemand Patterns
2000 –
Order Order
2000 –
1500 –
1000 –
500 –
Bic
ycle
s
Order1000 onday 3
Order1000 onday 8
1500 –
1000 –
500 –
Rim
s
15 – 7Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
| | | | | | | | | |1 5 10
Day
0
(a) Parent inventory
Reorder point
(b) Component demand
0 | | | | | | | | | |1 5 10
Day
Figure 15.3 – Lumpy Dependent Demand Resulting from Continuous Independent Demand
A record of all components of an itemShows the parent-component relationship
Bill of MaterialsBill of Materials
The usage quantities are derived from engineering and process designFive common terms
End itemsIntermediate itemsSubassemblies
15 – 8Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
SubassembliesPurchased items
Part commonality (sometimes called standardization of parts or modularity)
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Bill of MaterialsBill of Materials
Seat cushion
Seat-frame boards
Front A
Back
Leg supports
Back slats
15 – 9Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
legs A Ladder-back
chair
legs
Figure 15.4 – BOM for a Ladder-Back Chair
Bill of MaterialsBill of Materials
ALadder-back
chair
G (4)F (2) I (1)H (1)
C (1)Seat
subassembly
D (2)Front legs
B (1)Ladder-backsubassembly
E (4)Leg
supports
15 – 10Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
J (4)Seat-frame
boards
( )Back slats
( )Back legs
( )Seat cushion
( )Seat frame
Figure 15.4 – BOM for a Ladder-Back Chair
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Details how many end items will be produced within specified periods of time
It breaks the sales and operations plan into specific
Master Production Schedule (MPS)Master Production Schedule (MPS)
It breaks the sales and operations plan into specific product schedulesCreate a prospective MPS and test whether it meets the schedule with available resources
Sums of quantities must equal sales and operational planProduction must be allocated efficiently over
15 – 11Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Production must be allocated efficiently over timeCapacity limitations and bottlenecks may be determined
Master Production Schedule (MPS)Master Production Schedule (MPS)
April MayApril May
1 2 3 4 5 6 7 8
Ladder-back chair
Kitchen chair
Desk chair
150 150
120 120
200 200 200 200
15 – 12Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Aggregate production plans for chair family
Figure 15.5 – MPS for a Family of Chairs
670 670
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Master Production Schedule (MPS)Master Production Schedule (MPS)
No
Materialrequirements
Yes
Authorized masterproduction
Are resourcesavailable?
Prospective masterproductionschedule
Authorizedproduction
plan
15 – 13Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirementsplanning
productionschedule
Figure 15.6 – Master Production Scheduling Process
Developing a MPSDeveloping a MPS
Step 1: Calculate projected on-hand inventories
P j t d h d O h d MPS tit P j t d= + –
Projected on-handinventory at end
of this week
On-handinventory at
end of last week
MPS quantitydue at startof this week
Projectedrequirements
this week
where:Projected requirements = max(Forecast, Customer orders booked)
15 – 14Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
=Inventory +55 chairscurrentlyin stock
–MPS quantity(0 for week 1)
38 chairs alreadypromised for
delivery in week 1
= 17 chairs
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Item: Ladder-back chair
QuantityApril
Developing a MPSDeveloping a MPS
E planationQuantity on Hand:
Forecast
Customer orders (booked)
Projected on-hand
1 255
30 30
38 27
17 –13
Explanation:Forecast is less than booked orders in week 1; projected on-hand inventory balance = 55 + 0 – 38 = 17.
Explanation:Forecast exceeds booked orders in week 2; projected on-hand inventory
15 – 15Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
inventory
MPS quantity
MPS start
0 0
p j ybalance = 17 + 0 – 30 = –13. The shortage signals a need to schedule an MPS quantity for completion in week 2.
Figure 15.7 – Master Production Schedule for Weeks 1 and 2
Developing a MPSDeveloping a MPS
Step 2: Determine the timing and size of MPS quantities
The goal is to maintain a nonnegative projected on-hand inventory balanceAs shortages are detected, MPS quantities should be scheduled to cover them
=Inventory17 chairs in
inventory at the + MPS quantityof 150 chairs – Forecast of
30 chairs
15 – 16Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
y yend of week 1 of 150 chairs 30 chairs
= 137 chairs
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Application 15.1Application 15.1
Determine the MPS for Product A that has a 50-unit policy and 5 units on hand. The demand forecast and booked orders are shown in the partially completed plan given in the Student N t Th l d ti i k H i th l t d lNotes. The lead time is one week. Here is the completed plan. You might want to ask a question or two on how they would respond to a customer request for a specific week and order quantity.
15 – 17Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Application 15.1Application 15.1
Item: Product A Order Policy: 50 unitsLead Time: 1 week
SOLUTION
Lead Time: 1 week
Quantity on Hand 5 1 2 3 4 5 6 7 8 9 10
Forecast 20 10 40 10 0 0 30 20 40 20
Customer orders (booked) 30 20 5 8 0 2 0 0 0 0
Projected on-hand inventory
15 – 18Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
MPS quantity
MPS start
Available-to-promise (ATP) inventory
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Application 15.1Application 15.1
Item: Product A Order Policy: 50 unitsLead Time: 1 week
SOLUTION
Lead Time: 1 week
Quantity on Hand 5 1 2 3 4 5 6 7 8 9 10
Forecast 20 10 40 10 0 0 30 20 40 20
Customer orders (booked) 30 20 5 8 0 2 0 0 0 0
Projected on-hand inventory 25 5 5 5 3 23 3 13 4315
15 – 19Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
MPS quantity
MPS start
Available-to-promise (ATP) inventory
50
5
50 50 50 50
50 50 50
35 50 50 50
50
Master Production Schedule (MPS)Master Production Schedule (MPS)
Available-to-promise (ATP) inventoryThe quantity of an end item that marketing can promise q y g pto deliver on specific datesIt is the difference between customer orders already booked and the quantity that operations is planning to produce
Freezing the MPSReconciling the MPS with sales and operations plans
15 – 20Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
plans
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Item: Ladder-back chair Order Policy: 150 unitsLead Time: 1 week
1 2 3 4 5 6 7 8
AprilQuantityon Hand: 55
May
Master Production Schedule (MPS)Master Production Schedule (MPS)
Forecast
Customerorders booked
Projected on-hand inventory
MPS quantity
MPS t t
30
38
30
27
30
24
30
8 0
35
0
35
0 0
3535
17 137 107 77 42 7 122 87
0 150 0 0 0 0 150 0
150 0 0 0 0 150 0 0
15 – 21Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Figure 15.8 – Master Production Schedule for Weeks 1–8
MPS start 150 0 0 0 0 150 0 0
Explanation:On-hand inventory balance = 17 + 150 – 30 = 137. The MPS quantity is needed to avoid a shortage of 30 – 17 = 13 chairs in week 2.
Explanation:The time needed to assemble 150 chairs is 1 week. The assembly department must start assembling chairs in week 1 to have them ready by week 2.
Item: Ladder-back chair Order Policy: 150 unitsLead Time: 1 week
1 2 3 4 5 6 7 8
AprilQuantityon Hand: 55
May
Master Production Schedule (MPS)Master Production Schedule (MPS)
Forecast
Customerorders booked
Projected on-hand inventory
MPS quantity
MPS t t
30
38
30
27
30
24
30
8 0
35
0
35
0 0
3535
17 137 107 77 42 7 122 87
0 150 0 0 0 0 150 0
150 0 0 0 0 150 0 0
15 – 22Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Figure 15.9 –MPS Record with an ATP Row
MPS start 150 0 0 0 0 150 0 0
Available-to-promise (ATP)inventory
17 91 150
Explanation:The total of customer orders booked until the next MPS receipt is 38 units. The ATP = 55 (on-hand) + 0 (MPS quantity) – 38 = 17.
Explanation:The total of customer orders booked until the next MPS receipt is 27 + 24 + 8 = 59 units. The ATP = 150 (MPS quantity) – 59 = 91 units..
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Inventory RecordInventory Record
Inventory transactions are the basic building blocks of up-to-date recordsT ti i l d l i dTransactions include releasing new orders, receiving scheduled receipts, adjusting due dates for scheduled receipts, withdrawing inventory, canceling orders, correcting inventory errors, rejecting shipments, and verifying losses and stock returnsInventory records divide the future into time
15 – 23Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Inventory records divide the future into time periods called time bucketsKeep track of inventory levels and component replenishment needs
Inventory RecordInventory Record
The time-phase information contained in the inventory record consists of:
Gross requirementsGross requirementsScheduled receipts Projected on-hand inventoryPlanned receipts Planned order releases
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= + –Projected on-handinventory balanceat end of week t
Inventory onhand at end of
week t–1
Scheduledor plannedreceipts in
week t
Grossrequirements
in week t
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Inventory RecordInventory Record
The on-hand inventory calculations for each week in Figure 15.10 are as follows
Weeks 2 and 3: 117 + 0 – 0 = 117Week 4: 117 + 0 – 120 = –3Week 5: –3 + 0 – 0 = –3Week 6: –3 + 0 – 150 = –153
Week 1: 37 + 230 – 150 = 117
15 – 25Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Week 6: 3 + 0 150 = 153Week 7: –153 + 0 – 120 = –273Week 8: –273 + 0 – 0 = –273
Inventory RecordInventory RecordItem: CDescription: Seat subassembly
Lot Size: 230 unitsLead Time: 2 weeks
Week
1 2 3 4 5 6 7 8
Gross 0 0 0 0120 120150Grossrequirements 0 0 0 0
Scheduledreceipts 0 0 0 0 0 0 0
Projectedon-handinventory
117 117 –3 –3 –153 –273 –273
Planned receipts
37
120 120150150
117
230
15 – 26Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Planned order releases
Explanation:Gross requirements are the total demand for the two chairs. Projected on-hand inventory in week 1 is 37 + 230 – 150 = 117 units.
Figure 15.10 – MRP Record for the Seat Subassembly
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Inventory RecordInventory RecordItem: CDescription: Seat subassembly
Lot Size: 230 unitsLead Time: 2 weeks
Week
1 2 3 4 5 6 7 8
Gross 150 0 0 120 1200 150 0
Figure 15.11 – Completed Inventory Record for the Seat Subassembly
Grossrequirements 150 0 0
Scheduledreceipts 230 0 0
Projectedon-handinventory
117 117 117
Planned receipts
37
120
0
227
230 230
187
120
0
77
0 150
0 0
227
0
0
187
15 – 27Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Planned order releases
Without a planned receipt in week 4, a shortage of 3 units will occur: 117 + 0 + 0 – 120 = –3 units. Adding the planned receipt brings the balance to 117 + 0 + 230 – 120 = 227 units. Offsetting for a 2-week lead time puts the corresponding planned order release back to week 2.
The first planned receipt lasts until week 7, when projected inventory would drop to 77 + 0 + 0 – 120 = –43 units. Adding the second planned receipt brings the balance to 77 + 0 + 230 – 120 = 187 units. The corresponding planned order release is for week 5 (or week 7 minus 2 weeks).
230 230
Planning lead timeFor purchased items planning lead time is
Planning FactorsPlanning Factors
p p gthe time allowed for receiving a shipment from the supplierFor manufactured the planning lead time consists of estimates for
Setup time
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Processing timeMaterials handling time between operationsWaiting time
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Lot-sizing rulesFixed order quantity (FQO) rule maintains
Planning FactorsPlanning Factors
q y ( Q )the same order quantity each time an order is issuedCould be determined by quantity discounts, truckload capacity, minimum purchases, or EOQ
15 – 29Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Periodic order quantity (POQ) rule allows a different order quantity for each order issue but tends to issue the order at predetermined time
Planning FactorsPlanning Factors
tends to issue the order at predetermined time intervals
= –POQ lot size to arrive in
week t
Total gross requirementsfor P week, including
week t
Projected on-hand inventory balance at
end of week t–1
15 – 30Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Figure 15.12 shows the application of the POQ rule for P = 3
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Planning FactorsPlanning Factors
The first order using P = 3 is
= –(POQ lot size)Gross requirements
for weeks 4, 5, and 6
Inventory at end of week 3
(POQ lot size) = (120 + 0 + 150) – 117 = 153 units
15 – 31Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Planning FactorsPlanning Factors
15 – 32Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Figure 15.12 – The POQ (P = 3) Rule for the Seat Subassembly
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Lot-for-lot (L4L) rule where the lot size covers the gross requirements of a single week
Planning FactorsPlanning Factors
= –L4L lot size to arrive in
week tGross requirements
for week tProjected on-hand
inventory balance at end of week t–1
Figure 15.13 shows the application of the L4L
G i t I t b l
15 – 33Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
= –(L4L lot size) Gross requirementsin week 4
Inventory balance at end of week 3
(L4L lot size) = 120 – 117 = 3 units
Planning FactorsPlanning Factors
15 – 34Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Figure 15.13 – The L4L Rule for the Seat Subassembly
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Application 15.2Application 15.2
Item H10-A is a produced item (not purchased) with an order quantity of 80 units. Complete the rest of its MRP record using the fixed order quantity (FOQ) rule
SOLUTION
Item: H10-ADescription: Chair seat assembly
Lot Size: FOQ = 80 unitsLead Time: 4 weeks
Week31 32 33 34 35 36 37 38 39 40
Grossrequirements 60 35 45 60Scheduled
15 – 35Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Scheduledreceipts 80Projectedon-handinventoryPlanned receiptsPlanned order releases
20
Application 15.2Application 15.2
Item H10-A is a produced item (not purchased) with an order quantity of 80 units. Complete the rest of its MRP record using the fixed order quantity (FOQ) rule
SOLUTION
Item: H10-ADescription: Chair seat assembly
Lot Size: FOQ = 80 unitsLead Time: 4 weeks
Week31 32 33 34 35 36 37 38 39 40
Grossrequirements 60 35 45 60Scheduled
15 – 36Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Scheduledreceipts 80Projectedon-handinventoryPlanned receiptsPlanned order releases
20
80
80
40 60
80
80
20 40 40 40 40 5 5 40
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Application 15.3Application 15.3
Now complete the H10-A record using a POQ rule. The P should give an average lot size of 80 units. Assume the average weeklygive an average lot size of 80 units. Assume the average weekly requirements are 20 units.
P = = 4 weeks8020
15 – 37Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Application 15.3Application 15.3
SOLUTION
Item: H10-A Lot Size: POQ = 4Item: H10 ADescription: Chair seat assembly
Lot Size: POQ = 4Lead Time: 4 weeks
Week31 32 33 34 35 36 37 38 39 40
Grossrequirements 60 35 45 60Scheduledreceipts 80Projectedon-handinventory
20
15 – 38Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Planned receiptsPlanned order releases
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Application 15.3Application 15.3
SOLUTION
Item: H10-A Lot Size: POQ = 4Item: H10 ADescription: Chair seat assembly
Lot Size: POQ = 4Lead Time: 4 weeks
Week31 32 33 34 35 36 37 38 39 40
Grossrequirements 60 35 45 60Scheduledreceipts 80Projectedon-handinventory
20 20 40 40 40 40 5 5 60 60 0
15 – 39Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Planned receiptsPlanned order releases
100
100
Application 15.4Application 15.4
Revise the H10-A record using the lot-for-lot (L4L) Rule. (Complete the highlighted section)
SOLUTIONSOLUTION
Item: H10-ADescription: Chair seat assembly
Lot Size: FOQ = 80 unitsLead Time: 4 weeks
Week31 32 33 34 35 36 37 38 39 40
Grossrequirements 60 35 45 60Scheduledreceipts 80
15 – 40Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
receipts 80Projectedon-handinventoryPlanned receiptsPlanned order releases
20
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Application 15.4Application 15.4
Revise the H10-A record using the lot-for-lot (L4L) Rule. (Complete the highlighted section)
SOLUTIONSOLUTION
Item: H10-ADescription: Chair seat assembly
Lot Size: FOQ = 80 unitsLead Time: 4 weeks
Week31 32 33 34 35 36 37 38 39 40
Grossrequirements 60 35 45 60Scheduledreceipts 80
15 – 41Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
receipts 80Projectedon-handinventoryPlanned receiptsPlanned order releases
20 20 40 40 40 40 5 5 0 0 0
60
60
40
40
Comparing lot-sizing rules
Planning FactorsPlanning Factors
FOQ: = 181 units227 + 227 + 77 + 187 + 187
5
POQ: = 60 units150 + 150 + 0 + 0 + 0
5
15 – 42Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
L4L: = 0 units0 + 0 + 0 + 0 + 0
5
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Lot sizes affect inventory costs and setup and ordering costs
Planning FactorsPlanning Factors
The FOQ rule generates a high level of average inventory because it creates inventory remnantsThe POQ rule reduces the amount of average on-hand inventory because it does a better job of matching order quantity to requirementsThe L4L rule minimizes inventory investment, but
15 – 43Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
y ,it also maximizes the number of orders placed
Planning FactorsPlanning Factors
Safety stock for dependent demand items with lumpy demand (gross requirements) is helpful
l h f t i t th ti ionly when future gross requirements, the timing or size of scheduled receipts, and the amount of scrap that will be produced are certainSafety stock is used for end items and purchased items to protect against fluctuating customer orders and unreliable suppliers
15 – 44Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Planning FactorsPlanning Factors
15 – 45Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Figure 15.14 – Inventory Record for the Seat Subassembly Showing the Application of a Safety Stock
Outputs from MRPOutputs from MRP
MRP explosion
Material requirements planAction notices• Releasing new orders• Adjusting due dates
Priority reports• Dispatch lists• Supplier schedules
Capacity reports• Capacity requirements planning• Finite capacity scheduling• Input-output control
Routings and time
standards
15 – 46Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Manufacturing resources plan
Performance reportsCost and price data
Figure 15.15 – MRP Outputs
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MRP ExplosionMRP Explosion
Translates the MPS and other sources of demand into the requirements needed for all of the subassemblies components and raw materialssubassemblies, components, and raw materials the firm needs to produce parent itemsAn item’s gross requirements are derived from three sources
The MPS for immediate parents that are end itemsThe planned order releases for parents below the MPS level
15 – 47Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Any other requirements not originating in the MPS, such as the demand for replacement parts
MRP ExplosionMRP Explosion
C(1)Seat
b blsubassembly
H(1)Seat
frame
I(1)Seat
cushion
15 – 48Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
J(4)Seat-frame
boardsFigure 15.16 – BOM for the Seat
Subassembly
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Item: Seat subassemblyLot size: 230 units
LeadWeek
MRP ExplosionMRP Explosion
Lead time: 2 weeks
Gross requirements 150
1
230
117
2 3
120
4 5
150
6
120
7 8
Scheduled receipts
Projected on-hand 37 117 117
0 00 0
0 0 00 00 0
227 227 77 187 187
15 – 49Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
inventory
Planned receipts
Planned order releases
230230
230230
Figure 15.17 – MRP Explosion of Seat Assembly Components
Item: Seat subassemblyLot size: 230 units
Lead time: 2 weeks
Gross requirements 150150
1 2 3
120120
4 5
150150
6
120120
7 8
Planned
Week
0 00 0
230230
MRP ExplosionMRP Explosion
receipts
Planned order releases
230
230
230
230
15 – 50Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
Figure 15.17 – MRP Explosion of Seat Assembly Components
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MRP ExplosionMRP ExplosionItem: Seat subassemblyLot size: 230 units
Lead time: 2 weeks
Gross requirements 150150
1 2 3
120120
4 5
150150
6
120120
7 8
Planned
Week
0 00 0
230230
Item: Seat framesLot size: 300 units
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
Item: Seat cushionLot size: L4L
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
receipts
Planned order releases
230
230
230
230
15 – 51Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
40
00 00 00300 00 0
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
0
00 00 000 00 0
Figure 15.17 – MRP Explosion of Seat Assembly Components
MRP ExplosionMRP ExplosionItem: Seat subassemblyLot size: 230 units
Lead time: 2 weeks
Gross requirements 150150
1 2 3
120120
4 5
150150
6
120120
7 8
Planned
Week
0 00 0
230230
Item: Seat framesLot size: 300 units
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
Item: Seat cushionLot size: L4L
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
receipts
Planned order releases
230
230
230
230
Usage quantity: 1 Usage quantity: 1
0 230 0 230
15 – 52Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
40
00 00 00300 00 0
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
0
00 00 000 00 0
Figure 15.17 – MRP Explosion of Seat Assembly Components
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MRP ExplosionMRP ExplosionItem: Seat subassemblyLot size: 230 units
Lead time: 2 weeks
Gross requirements 150150
1 2 3
120120
4 5
150150
6
120120
7 8
Planned
Week
0 00 0
230230
Item: Seat framesLot size: 300 units
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
Item: Seat cushionLot size: L4L
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
receipts
Planned order releases
230
230
230
230
Usage quantity: 1 Usage quantity: 1
0 230 0 230 00 230000 2300
15 – 53Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
40
00 00 00300 00 0
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
0
00 00 000 00 0
Figure 15.17 – MRP Explosion of Seat Assembly Components
MRP ExplosionMRP ExplosionItem: Seat subassemblyLot size: 230 units
Lead time: 2 weeks
Gross requirements 150150
1 2 3
120120
4 5
150150
6
120120
7 8
Planned
Week
0 00 0
230230receipts
Planned order releases
230
230
230
230
Item: Seat framesLot size: 300 units
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
Item: Seat cushionLot size: L4L
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Week
0 230 0 230 00 230000 2300 00 00 0 00 00 0
15 – 54Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
40
00 00 00300 00 0
requirements
00Scheduled receipts
Projected on-hand inventory
Planned receipts
Planned order releases
0
00 00 000 00 0
4040 110110 110110 110 180 180 180 180
300
300
00 00 00 0 0 0 0 0
230
230
230
230
Figure 15.17 – MRP Explosion of Seat Assembly Components
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MRP ExplosionMRP ExplosionItem: Seat framesLot size: 300 units
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Planned
Week
300
Item: Seat cushionLot size: L4L
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Planned
Week
230230
00 00 00 00230 2300 000 00 00 00230 2300 0
receipts
Planned order releases
300
300
receipts
Planned order releases
230
230
230
230
Gross requirements
1 2 3 4 5 6 7 8
Week
Item: Seat-frame boardsLot size: 1500 units
Lead time: 1 week
15 – 55Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirements
00Scheduled receipts
Planned receipts
Planned order releases
200
00 00 000 00 0
Projected on-hand inventory
Figure 15.17 – MRP Explosion of Seat Assembly Components
MRP ExplosionMRP ExplosionItem: Seat framesLot size: 300 units
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Planned
Week
300
Item: Seat cushionLot size: L4L
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Planned
Week
230230
00 00 00 00230 2300 000 00 00 00230 2300 0
Gross requirements
1 2 3 4 5 6 7 8
Week
Item: Seat-frame boardsLot size: 1500 units
Lead time: 1 week
00 1200 00 000 00 0
receipts
Planned order releases
300
300
receipts
Planned order releases
230
230
230
230
Usage quantity: 4
15 – 56Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirements
00Scheduled receipts
Planned receipts
Planned order releases
200
00 00 000 00 0
Projected on-hand inventory
Figure 15.17 – MRP Explosion of Seat Assembly Components
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MRP ExplosionMRP ExplosionItem: Seat framesLot size: 300 units
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Planned
Week
300
Item: Seat cushionLot size: L4L
Lead time: 1 week
Gross requirements
1 2 3 4 5 6 7 8
Planned
Week
230230
00 00 00 00230 2300 000 00 00 00230 2300 0
receipts
Planned order releases
300
300
receipts
Planned order releases
230
230
230
230
Gross requirements
1 2 3 4 5 6 7 8
Week
Item: Seat-frame boardsLot size: 1500 units
Lead time: 1 week
00 1200 00 000 00 0
15 – 57Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
requirements
00Scheduled receipts
Planned receipts
Planned order releases
200
00 00 000 00 0
Projected on-hand inventory
200 200 200 500 500 500 500 500
1500
1500
Figure 15.17 – MRP Explosion of Seat Assembly Components
Other Important ReportsOther Important Reports
Action noticeCapacity requirements planning (CRP)p y q p g ( )Theory of constraints principles can be applied to keep bottleneck operations fed by adjusting some lot sizing rules or occasionally overriding planned order releases
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Priority reportsManufacturing resource planning (MRP II)
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MRP and the EnvironmentMRP and the Environment
Consumer and government concern about the deterioration of the naturalthe deterioration of the natural environment has driven manufacturers to reengineer their processes to become more environmentally friendlyCompanies can modify their MRP systems to help track these waste and plans for th i di l
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their disposal
Application 15.5Application 15.5
A firm makes a product (Item A) from three components (intermediate Items B and D, and purchased item C). The latest MPS for product A calls for completion of a 250-unit order in
k 8 d it l d ti i 2 k Th t h d l dweek 8, and its lead time is 2 weeks. The master schedule and bill of material for Product A are given below.
Item: End Item A Lead Time: 2 wks
Week
1 2 3 4 5 6 7 8
MPS quantity 250
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MPS start 250
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Application 15.5Application 15.5
Develop a material requirements plan for items B, C, and D, given the following inventory data. Blank MRP d id d i th
A
C(2)
C(2) B(1)
MRP records are provided in the Student Notes, and the completed records are shown on the next slide.
B(1) C(1) D(2)
Data CategoryItem
B C D
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Data Category B C DLot-sizing rule POQ (P = 5) FOQ = 1000 L4LLead time 2 weeks 1 week 3 weeksScheduled receipts None 1000 (week 1) None
Beginning inventory 0 800 0
Application 15.5Application 15.5
SOLUTIONAn item’s gross requirements cannot be derived until all of its immediate parents are processed. Thus we must begin withimmediate parents are processed. Thus we must begin with Item D. Its only immediate parent is item A, and its planned “production plan” is shown by the MPS start row. Note the 2-for-1 usage quantity when deriving D’s gross requirements.
Item: D Lot Size: L4LDescription: Lead Time: 3 weeks
Week1 2 3 4 5 6 7 8
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1 2 3 4 5 6 7 8
Gross requirements 500
Scheduled receipts
Projected on-hand inventory 0 0 0 0 0 0 0 0 0
Planned receipts 500
Planned order releases 500
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Application 15.5Application 15.5
We can do item B next, because the planned “production quantities” for its two immediate parents (A and D) are known. Item C cannot be done yet, because one of its parents is item B d it POR till kB, and its PORs are still unknown.
Item: B Lot Size: POQ = 5Description: Lead Time: 3 weeks
Week1 2 3 4 5 6 7 8
Gross requirements
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Gross requirements
Scheduled receipts
Projected on-hand inventory 0 0 0 0 0 0 0 0
Planned receipts
Planned order releases
Application 15.5Application 15.5
We can do item B next, because the planned “production quantities” for its two immediate parents (A and D) are known. Item C cannot be done yet, because one of its parents is item B d it POR till kB, and its PORs are still unknown.
Item: B Lot Size: POQ = 5Description: Lead Time: 3 weeks
Week1 2 3 4 5 6 7 8
Gross requirements 500 250
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Gross requirements 500 250
Scheduled receipts
Projected on-hand inventory 0 0 0 0 0 0 0 0 0
Planned receipts 750
Planned order releases 750
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Application 15.5Application 15.5
Finally we can do Item C, because we now know the planned “production quantities” of both of its immediate parents (A and B). Note that the usage quantity for its parent B is 2-for-1.
Item: C Lot Size: 1000Description: Lead Time: 1 week
Week1 2 3 4 5 6 7 8
Gross requirements 1500 250
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Gross requirements 1500 250
Scheduled receipts 1000
Projected on-hand inventory 800 300 300 300 300 300 1050 1050 1050
Planned receipts 1000
Planned order releases 1000
Resource Planning for Service Providers
Dependent demand for servicesRestaurantsAirlinesHospitalsHotels
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Bill of resources (BOR)
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Level 1Discharge
Level 2Intermediate care
Bill of ResourcesBill of Resources
Level 6Preoperative care
(Angiogram)
Level 3Postoperative care
(Step down)
Level 4Postoperative care
(Intensive)
Level 5Surgery
(b)
Nurse(6 hr)
MD(1 hr)
Therapy(1 hr)
Bed(24 hr)
Lab(3 tests)
Kitchen(1 meal)
Pharmacy(10
medicines)
(Angiogram)
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(a)
Level 7Preoperative care
(Testing)
Level 6Preoperative care
(Angiogram)
Figure 15.18 – BOR for Treating an Aneurysm
Solved Problem 1Solved Problem 1
Refer to the bill of materials for product A shown in Figure 15.19. If there is no existing inventory and no scheduled receipts, how many units of items G, E, and D must be
h d t d 5 it f d it A?purchased to produce 5 units of end item A?
LT = 2 LT = 3
B (3) C (1)
LT = 1
A
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G (1)
LT = 3
LT = 3
D (1)
LT = 3
D (1)
LT = 6
E (2)
LT = 1
F (1)
Figure 15.19 – BOM for Product A
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Solved Problem 1Solved Problem 1
SOLUTIONFive units of item G, 30 units of item E, and 20 units of item D must be purchased to make 5 units of A. The usage quantitiesmust be purchased to make 5 units of A. The usage quantities shown in Figure 15.21 indicate that 2 units of E are needed to make 1 unit of B and that 3 units of B are needed to make 1 unit of A; therefore, 5 units of A require 30 units of E(2 × 3 × 5 = 30). One unit of D is consumed to make 1 unit of B, and 3 units of B per unit of A result in 15 units of D(1 × 3 × 5 = 15); 1 unit of D in each unit of C and 1 unit of C per unit of A result in another 5 units of D(1 × 1 × 5 = 5). The total requirements to make 5 units of A are 20 units of D(15 + 5). The calculation of requirements
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for G is simply 1 × 1 × 1 × 5 = 5 units.
Solved Problem 2Solved Problem 2
The order policy is to produce end item A in lots of 50 units. Using the data shown in Figure 15.20 and the FOQ lot-sizing rule, complete the projected on-hand inventory and MPS
tit Th l t th MPS t t b ff ttiquantity rows. Then complete the MPS start row by offsetting the MPS quantities for the final assembly lead time. Finally, compute the available-to-promise inventory for item A. If in week 1 a customer requests a new order for 30 units of item A, when is the earliest date the entire order could be shipped?
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Solved Problem 2Solved Problem 2
Item: A Order Policy: 50 unitsLead Time: 1 week
Week1 2 3 4 5 6 7 8 9 101 2 3 4 5 6 7 8 9 10
Forecast 20 10 40 10 0 0 30 20 40 20
Customer orders (booked)
30 20 5 8 0 2 0 0 0 0
Projectedon-handinventory
25
MPS quantity 50
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MPS start
Available-to-promise (ATP) inventory
Figure 15.20 – MPS Record for End Item A
Solved Problem 2Solved Problem 2
SOLUTIONThe projected on-hand inventory for the second week is
= + –Projected on-handinventory at end
of week 2
On-handinventory in
week 1MPS quantitydue in week 2
Requirementsin week 2
= 25 + 0 – 20 = 5 units
where requirements are the larger of the forecast or actual customer orders booked for shipment during this period No
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customer orders booked for shipment during this period. No MPS quantity is required. Without an MPS quantity in the third period, a shortage of item A will occur: 5 + 0 – 40 = –35. Therefore, an MPS quantity equal to the lot size of 50 must be scheduled for completion in the third period. Then the projected on-hand inventory for the third week will be 5 + 50 – 40 = 15.
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Solved Problem 2Solved Problem 2
Figure 15.21 shows the projected on-hand inventories and MPS quantities that would result from completing the MPS calculations. The MPS start row is completed by simply shifting
f th MPS tit t th l ft b l ta copy of the MPS quantity row to the left by one column to account for the 1-week final assembly lead time. Also shown are the available-to-promise quantities. In week 1, the ATP is
= + –Available-to-promise in
week 1
On-handquantity in
week 1MPS quantity
in week 1Orders booked upto week 3 when thenext MPS arrives
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= 5 + 50 – (30 + 20) = 5 units
Solved Problem 2Solved Problem 2
The ATP for the MPS quantity in week 3 is
=Available-to-promise in MPS quantity Orders booked up
to week 7 when the= –promise inweek 3
q yin week 3 to week 7 when the
next MPS arrives
= 50 – (5 + 8 + 0 + 2) = 35 units
The other ATPs equal their respective MPS quantities because no orders are booked for those weeks. As for the new order for 30 units in week 1, the earliest it can be shipped is week 3 because the ATP for week 1 is insufficient. If the customer
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accepts the delivery date of week 3, the ATP for week 1 will stay at 5 units and the ATP for week 3 will be reduced to 5 units. This acceptance allows the firm the flexibility to immediately satisfy an order for 5 units or less, if one comes in. When the MPS is updated next, the customer orders booked for week 3 would be increased to 35 to reflect the new order’s shipping date.
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Solved Problem 2Solved Problem 2
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Figure 15.21 – Completed MPS Record for End Item A
A
Solved Problem 3Solved Problem 3
The MPS start quantities for product A calls for the assembly department to begin final assembly
di t th f ll i
B (1) C (2)
LT = 2
LT = 1 LT = 2
according to the following schedule: 100 units in week 2; 200 units in week 4; 120 units in week 6; 180 units in week 7; and 60 units in week 8. Develop a material requirements plan for the next 8 weeks for items B, C, and D. The BOM for A is shown in Figure 15.22, and data from the inventory records
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D (1)
LT = 3
and data from the inventory records are shown in Table 15.1.
Figure 15.21 – BOM for Product A
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Solved Problem 3Solved Problem 3
TABLE 15.1 | INVENTORY RECORD DATA
ItemData Category B C DLot-sizing rule POQ (P=3) L4L FOQ = 500 unitsLead time 1 week 2 weeks 3 weeksScheduled receipts None 200 (week 1) NoneBeginning (on-hand) inventory 20 0 425
SOLUTION
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We begin with items B and C and develop their inventory records, as shown in Figure 15.23. The MPS for product A must be multiplied by 2 to derive the gross requirements for item C because of the usage quantity. Once the planned order releases for item C are found, the gross requirements for item D can be calculated.
Solved Problem 3Solved Problem 3
Item: B Lot Size: POQ (P = 3)Lead Time: 1 week
Week1 2 3 4 5 6 7 8 9 101 2 3 4 5 6 7 8 9 10
Gross requirements 100 200 120 180 60
Scheduled receipts
Projectedon-handinventory
20 200 200 0 0 240 60 0 0 0
Planned receipts 280 360
20
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Planned order releases 280 360
Figure 15.23 – Inventory Records for Items B, C, and D
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Solved Problem 3Solved Problem 3
Item: C Lot Size: L4LLead Time: 2 weeks
Week1 2 3 4 5 6 7 8 9 101 2 3 4 5 6 7 8 9 10
Gross requirements 200 400 240 360 120
Scheduled receipts 200
Projectedon-handinventory
200 0 0 0 0 0 0 0 0 0
Planned receipts 400 240 360 120
0
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Planned order releases 400 240 360 120
Figure 15.23 – Inventory Records for Items B, C, and D
Solved Problem 3Solved Problem 3
Item: D Lot Size: FOQ =500 unitsLead Time: 1 week
Week1 2 3 4 5 6 7 8 9 101 2 3 4 5 6 7 8 9 10
Gross requirements 400 240 360 120
Scheduled receipts
Projectedon-handinventory
425 25 25 285 425 305 305 305 305 305
Planned receipts 500 500
425
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Planned order releases 500 500
Figure 15.23 – Inventory Records for Items B, C, and D
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