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MRP and Dependent Inventory Models

MRP and Dependent Inventory Models. Inventory Classifications. Inventory. Process stage. Number & Value. Demand Type. Other. Raw Material WIP Finished Goods. A Items B Items C Items. Maintenance Dependent Operating. Independent Dependent. Materials With. Materials With. Item.

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MRP and Dependent Inventory Models

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  1. MRP and Dependent Inventory Models

  2. Inventory Classifications Inventory Process stage Number & Value Demand Type Other Raw Material WIP Finished Goods A Items B Items C Items Maintenance Dependent Operating Independent Dependent

  3. Materials With Materials With Item Independent Demand Dependent Demand Demand Company Customers Parent Items Source Material Finished Goods WIP & Raw Materials Type Method of Forecast & Booked Calculated Estimating Customer Orders Demand Planning EOQ & ROP MRP Method Dependent versus Independent Demand

  4. Marketing Customer Demand Production Capacity Inventory Finance Cash Flow Human Resources Manpower Planning Production Plan Procurement Supplier Performance Management Return on Investment Capital Engineering Design Completion Inputs to the Production Plan

  5. Bicycle(1) P/N 1000 Handle Bars (1) Frame Assy (1) P/N 1001 P/N 1002 Wheels (2) Frame (1) P/N 1003 P/N 1004 Bill-of-Material Product Structure Tree

  6. D B E A E G C F D 1 2 3 4 5 6 7 8 Time-Phased Product Structure Must have D and E completed here so production can begin on B Start production of D 1 week 2 weeks to produce 2 weeks 1 week 2 weeks 1 week 2 weeks 3 weeks 1 week

  7. MRP Requirements • Mainly discrete products • Accurate bill-of-material • Accurate inventory status • 99% inventory accuracy • Stable lead times

  8. Master Production Schedule BOM (Bill-of-Material) MRP by period report Lead Times MRP by date report (Item Master File) MRP Programs Planned orders report Inventory Data Purchase requirements Purchasing data Exception reports Structure of the MRP System

  9. MRP and JIT • MRP - a planning and scheduling technique with fixed lead times • JIT - a way to move material expeditiously • Integrating the two: • Small bucket approach and back flushing • balanced flow approach

  10. Lot-Sizing Techniques • Lot-for-lot • Economic Order Quantity • Part Period Balancing • Wagner-Whitin Algorithm

  11. Extensions of MRP • Closed loop MRP • MRP II - Material Resource Planning • Enterprise Resource Planning

  12. MRP in Services • Can be used when demand for service or service items is directly related to or derived from demand for other services • restaurant - rolls required for each meal • hospitals - implements for surgery • etc.

  13. The MRP Woorksheet • Usually computerized • Understanding provides for problem solution • Relationship to cycle counts

  14. Definitions

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