materials requirement planning (mrp)
DESCRIPTION
Materials Requirement Planning (MRP). The approach to coordinated scheduling for dependent demand items. The Responsibility of Manufacturing activities. 1.Design requirements and specifications and standards. 2.Be manufactured economically and environmentally friendly. - PowerPoint PPT PresentationTRANSCRIPT
Introduction to lean 1
Materials Requirement Planning (MRP)
The approach to coordinated scheduling for dependent demand items.
Introduction to lean 2
The Responsibility of Manufacturing activities
1. Design requirements and specifications and standards.2. Be manufactured economically and environmentally
friendly.3. Build-in quality at each stage.4. Production methods must be sufficiently flexible to
respond to changing market demands, types of products, production rates, and production quantities and to provide on-time delivery to the customer.
5. New developments in materials, production methods, and computer integration of both technological and managerial activities.6. Safety.
Introduction to lean 3
Production Planning and Control
Planning and control of the flow of materials through the manufacturing process
1. Production planning
Production must be able to meet the demand of the marketplace
a). Forecasting
b). Master planning
c). Material requirements planning
d). Capacity planning
2. Implementation and control
3. Inventory management
Introduction to lean 4
Production Planning System
Introduction to lean 5
Material Requirements Plan (MRP)
The quantities of each product group that must be produced in each period.
The desired inventory levels. The resources of equipment, labor, and
material needed in each period. Time
Introduction to lean 6
Example 1.
Amalgamated Fish Sinkers makes a product group of fresh fish sinkers and wants to develop a production plan for them. The expected opening inventory is 100 cases, and they want to reduce that to 80 cases by the end of the planning period. The number of working days is the same for each period. There are no back orders. The expected demand for the fish sinkers is as follows:
a). How much should be produced each period?b). What is the ending inventory for each period?c). If the cost of carrying inventory is $5 per case per period
based on ending inventory, what is the total cost of carrying inventory?
d). What will be the total cost of the plan?
Introduction to lean 7
Period 1 2 3 4 5 TotalForecast (cases) 110 120 130 120 120 600
Production
Ending
Inventory100
Introduction to lean 8
Period 1 2 3 4 5 TotalForecast (cases) 110 120 130 120 120 600
Production 116 116 116 116 116 580Ending
Inventory100
Answer
a). Total production required = 600 + 80 - 100 = 580 cases
Production each period = 580 / 5 = 116 cases
Introduction to lean 9
Period 1 2 3 4 5 TotalForecast (cases) 110 120 130 120 120 600
Production 116 116 116 116 116 580Ending
Inventory100 106
b). Ending inventory = opening inventory + production - demand
Ending inventory after the first period = 100 + 116 - 110 = 106 cases
+ - =
Introduction to lean 10
Period 1 2 3 4 5 TotalForecast (cases) 110 120 130 120 120 600
Production 116 116 116 116 116 580Ending
Inventory100 106
b). Ending inventory = opening inventory + production - demand
Ending inventory after the first period = 100 + 116 - 110 = 106 cases
+ - =
Introduction to lean 11
Period 1 2 3 4 5 TotalForecast (cases) 110 120 130 120 120 600
Production 116 116 116 116 116 580Ending
Inventory100 106 102 88 84 80
c). The total cost of carrying inventory would be:
(106 + 102 + 88 + 84 + 80)($5) = $2300
d). Since there were no stockouts and no changes in the level of
production, this would be the total cost of the plan.
Master Scheduling 12
Master Scheduling
Production plan:
Families of products
Master production schedule (MPS):
End items. It breaks down the production plan into the requirements for
individual end items, in each family, by date and quantity.
The total of the items in the MPS should be equal to the total
shown on the production plan.
Master Scheduling 13
Master Scheduling
The information needed to develop an MPS :
The production plan
Forecasts for individual end items
Actual orders received from customers and for
stock replenishment
Inventory levels for individual end items
Capacity restraints
Master Scheduling 14
Example 1.
The Hotshot Lightning Rod Company makes a family of two lightning rods, Models H and I. It bases its production planning on months. For the present month, production is leveled at 1000 units. Opening inventory is 500 units, and the plan is to reduce that to 300 units by the end of the month. The MPS is made using weekly periods. There are four weeks in this month, and production is to be leveled at 250 units per week. The forecast and projected available for the two lightning rods follows. Calculate an MPS for each item.
Master Scheduling 15
Answer
Production Plan:
Period 1 2 3 4 Total
Forecast 300 350 300 250 1200
Projected Available
500 450 350 300 300
Production Plan 250 250 250 250 1000
Master Scheduling 16
Forecasts for individual end items , Model H and I
Period 1 2 3 4 Total
Forecast 300 350 300 250 1200
Forecast for H 200 300 100 100 700
Forecast for I 100 50 200 150 500
Opening inventories are:
Model H 200
Model I 300
Master Scheduling 17
Master Schedule: Model H:
Period 1 2 3 4 Total
Forecast 200 300 100 100 700
Projected Available
200 250 200 100 100
MPS 250 250 100
Master Schedule: Model I:
Period 1 2 3 4 Total
Forecast 100 50 200 150 500
Projected Available
300 200 150 200 200
MPS 250 150
Master Scheduling 18
Master Schedule: Model H:
Period 1 2 3 4 Total
Forecast 200 300 100 100 700
Projected Available
200
MPS
Master Schedule: Model I:
Period 1 2 3 4 Total
Forecast 100 50 200 150 500
Projected Available
300
MPS
Master Scheduling 19
The objectives in developing an MPS
To maintain the desired level of customer service by
maintaining finished-goods inventory levels or by
scheduling to meet customer delivery requirements.
To make the best use of material, labor, and
equipment .
To maintain inventory investment at the required levels.
MRP 20
MRP Process
MRP Process uses four basic techniques Exploding and offsetting Gross and net requirements Releasing orders Low-level coding and netting
The most important thing to consider before making any decisions is lead time
MRP 21
MRP Process
Exploding requires a planner determine actual material required by multiplying usage by the quantity needed. Information is collected from the product tree.
Offsetting takes information from explosion and plans production based upon lead-time and relationship to parent.
MRP 22
MRP Process
Planned order composes of two elements: Planned order receipt. Planned order release.
Gross and Net requirementsNet = Gross requirements – Available inventory
MRP 23
Example 2:
Using the product tree and lead times shown in figure below, determine the planned order receipts and releases. There are 50 As required in week 5. Suppose there are 10 Bs available as well as the 20 As.
MRP 24
Part #Week
1 2 3 4 5
A
Gross RequirementsProjected Available 20Net requirementsPlanned Order ReceiptPlanned Order Release
20
30
5003030
B
Gross RequirementsProjected Available 10Net requirementsPlanned Order ReceiptPlanned Order Release
C
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release
D
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release
E
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release
MRP 25
Part #Week
1 2 3 4 5
A
Gross RequirementsProjected Available 20Net requirementsPlanned Order ReceiptPlanned Order Release
20
30
5003030
B
Gross RequirementsProjected Available 10Net requirementsPlanned Order ReceiptPlanned Order Release 20
103002020
C
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release 30
3003030
D
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release
E
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release
MRP 26
Part #Week
1 2 3 4 5
A
Gross RequirementsProjected Available 20Net requirementsPlanned Order ReceiptPlanned Order Release
20
30
5003030
B
Gross RequirementsProjected Available 10Net requirementsPlanned Order ReceiptPlanned Order Release 20
103002020
C
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release 30
3003030
D
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release 20
2002020
E
Gross RequirementsProjected AvailableNet requirementsPlanned Order ReceiptPlanned Order Release 20
2002020
MRP 27
MRP Process
Scheduled Receipts: Promised materials Become available to use immediately
Open Orders: Incomplete orders that have not been fully satisfied Example, we completed the production of markers but do
not have packaging
Net Requirements (Modified) = gross requirements- scheduled receipts – available inventory
MRP 28
Example 3:
Complete the following table. The lead time for the item is two weeks, and the order quantity is 200. What action should be taken?
Week 1 2 3 4Gross RequirementsScheduled ReceiptsProjected Available 150Net requirementsPlanned Order ReceiptPlanned Order Release
50 250200
100 50
MRP 29
Week 1 2 3 4Gross RequirementsScheduled ReceiptsProjected Available 150Net requirementsPlanned Order ReceiptPlanned Order Release
50
100
250200
100 50
Answer
Week 1 2 3 4Gross RequirementsScheduled ReceiptsProjected Available 150Net requirementsPlanned Order ReceiptPlanned Order Release
50
100
25020050
100 50
MRP 30
Week 1 2 3 4Gross RequirementsScheduled ReceiptsProjected Available 150Net requirementsPlanned Order ReceiptPlanned Order Release
50
100
25020050
100
5050?
50
Answer
Week 1 2 3 4Gross RequirementsScheduled ReceiptsProjected Available 150Net requirementsPlanned Order ReceiptPlanned Order Release
50
100
200
25020050
100
15050200
50
X
Introduction to lean 31
Example 1 of MRP
Given the following product tree, explode, offset, and determine the gross and net ret requirements. All lead times are one week, and the quantities required are shown in parentheses. The master production schedule calls for the completion of 100 As in week 5. There is scheduled receipt of 100 Bs in week 1. There are also 200 Fs available.
Introduction to lean 32
Example 2 of MRP
Given the following product tree, explode, offset, and determine the gross and net ret requirements. All lead times are one week, and the quantities required are shown in parentheses. The master production schedule calls for the completion of 100 As in week 4 and 50 in week 5. There are 300 Bs scheduled to be received in week 1 and 200 Ds in week 3. There are also 20 As available. The ordering quantity for all parts is lot-for lot.
Introduction to lean 33
Example 3 of MRP
Given the following product tree, explode, offset, and determine the gross and net ret requirements. All lead times are one week, and the quantities required are shown in parentheses. The master production schedule calls for the completion of 100 As in week 4 and 50 in week 5. There are 100 Cs scheduled to be received in week 2. Lot size for part E is 500. Other parts are all lot-for lot.
Introduction to lean 34
References
Dave Dixon (2004), The truce between lean and IT, IE Industrial Engineer, 36(6), 42-45.
Charles M. Parks (2003), The Bare Necessities of Lean, IE Industrial Engineer, 35(8), 39-42.