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Fundamentals of MRP

Prof. Prasad Chakrabarti, CFPIM,CSCP(APICS)

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Planning and Control System

ProductionPlan

BusinessPlan

MasterProductionSchedule

Planning

Execution

MaterialRequirements

Plan

ProductionActivity Controland Purchasing

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Objectives of MRP

To determine the materials required What is required

How much is required

When it is required

To establish and maintain priorities

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Inputs to MRP Process

MPS

MRP

Planning Data

Bill ofMaterial

InventoryStatus

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Nature of Demand

Legs

206

Ends

433

Sides

711

Top

025

Hardware Kit

822

Table

100

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Description: Table

Part Number: 100

Part Number Description Quantity Required Unit of Measure

306 Wooden legs 4 EA

433 Wooden ends 2 EA711 Wooden sides 2 EA

025 Table top 1 EA

822 Hardware 1 Kit

Bill of Materials

A bill of material lists all the componentsneeded to make one assembly

Each part has a unique part number

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Bill of Materials

SingleLevel

Multilevel

Base

300

Top

025

Hardware

Kit

822

Table100

Legs

306

Leg Bolts

326

Frame

357

Base

300

Boards

031

Glue

075

Top

025

Hardware

Kit 822

Table

100

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The MRP Process

Determines What is needed

How much is needed

When to order

Involves

MPS data

Bills of material Inventory status

Planning data

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Lead Time, Exploding, and Offsetting

Lead time: The time from when an order is placed until the partis ready for use

Exploding: Multiplying the parent requirements by the usage

quantity through the product tree

Offsetting: Placing the requirements in their proper time periodsbased on lead time

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Planned Orders

Week

Item Planned Order 1 2 3 4 5

Number

B Receipt 50Release

ReceiptC Release

Receipt

D ReleaseReceipt

E Release

ReceiptF Release

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Gross and Net Requirements

Available inventory must be taken intoaccount

Net requirements = gross requirements available inventory

Example:Gross requirements 50 units

Available inventory 20 units

Net requirements 30 units

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Problem 4.3B

DC

E F LT = 1 WkLT = 1 Wk

LT = 1 WkLT = 2 Wks

LT = 1 Wk

Item Week

Number 1 3 4 5

Gross requirements 50

Projected available 20 20 20 20 20

B Net requirements 30

Planned order receipt 30

Planned order release 30

Gross requirements 30Projected available 10

C Net requirements

Planned order receipt

Planned order release

Gross requirements 30

Projected available 0 0 0

D Net requirements 30

Planned order receipt 30

Planned order release 30

Gross requirements

Projected available

E Net requirements

Planned order receipt

Planned order release

Gross requirements 20

Projected available 0

F Net requirements 20

Planned order receipt 20

Planned order release 20

2

0

0

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Problem 4.3 (Solution)B

DC

E F LT = 1 WkLT = 1 Wk

LT = 1 WkLT = 2 Wks

LT = 1 Wk

Item Week

Number 1 3 4 5

Gross requirements 50

Projected available 20 20 20 20 20 0

B Net requirements 30

Planned order receipt 30

Planned order release 30

Gross requirements 30Projected available 10 10 10 10 0

C Net requirements 20

Planned order receipt 20

Planned order release 20

Gross requirements 30

Projected available 0 0 0 0

D Net requirements 30

Planned order receipt 30

Planned order release 30

Gross requirements 20

Projected available 0

E Net requirements 20

Planned order receipt 20

Planned order release 20

Gross requirements 20

Projected available 0

F Net requirements 20

Planned order receipt 20

Planned order release 20

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