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Chapter 18. Materials Requirements Planning. Outline: Material Requirements Planning (MRP) Master Production Schedule (MPS) Bill of Materials (BOM) Time Fences MRP Logic and Product Structure Trees MRP Examples MRP and Lot Sizing MRP & Capacity Requirements Planning (CRP).

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chapter 18 materials requirements planning
Chapter 18. Materials Requirements Planning

Outline:

  • Material Requirements Planning (MRP)
  • Master Production Schedule (MPS)
  • Bill of Materials (BOM)
  • Time Fences
  • MRP Logic and Product Structure Trees
  • MRP Examples
  • MRP and Lot Sizing
  • MRP & Capacity Requirements Planning (CRP)
materials requirements planning
Materials Requirements Planning
  • Materials requirements planning (MRP) is a means for determining the number of parts, components, and materials needed to produce a product (end item)
  • Dependent vs. independent demand
  • MRP provides time scheduling information specifying when each of the subassemblies, parts, and components should be ordered or produced
    • What, when, how many?
  • Dependent demand drives MRP
  • MRP is an information system
materials requirements planning3
Materials Requirements Planning
  • Critical input and data requirements:
    • Master Production Schedule (MPS)
    • Bill of Materials (BOM)
    • Inventory database
  • Many outputs – primary ones are:
    • Planned orders to be released at a future time.
    • Order release notices to execute the planned orders.
    • Changes in due dates of open orders due to rescheduling.
    • Cancellations or suspensions of open orders due to cancellation or suspension of orders on the master production schedule.
    • Inventory status data. Planned order releases
master production schedule mps

MPS

(Specific End Items)

Master Production Schedule (MPS)
  • MPS: One of three primary inputs in MRP
  • Time-phased plan specifying how many and when the firm plans to build each end item
  • Developed by disaggregating the “aggregate plan”

Aggregate Plan

(Product Groups)

Week

bill of materials bom
Bill of Materials (BOM)
  • BOM: a listing of all of the raw materials, parts, subassemblies, and assemblies needed to produce one unit of a product.
  • Product structure tree: Visual depiction of the requirements in a bill of materials, where all components are listed by levels.
  • A simple question: For 100 “M”s how many…
bom tree format and low level coding
BOM - tree format and low level coding

Low-level coding requires that when an identical item occur on multiple levels, then it should be “lowered” to its lowest level for computational reasons. The software will complete all level 0 items first, then all level 1 items, etc.

In the original diagram (a) since N appears on levels 1 & 2

In the final diagram (b) (after re-classification) it is lowered to level 2.

Also, note that S under P was on level 3, which needed to be lowered to level 4

time fences
Time Fences
  • Frozen
    • No schedule changes allowed within this window
  • Moderately Firm
    • Specific changes allowed within product groups as long as parts are available
  • Flexible
    • Significant variation allowed as long as overall capacity requirements remain at the same levels
mrp example
MRP Example
  • Solved problem 1.
    • MPS: 100 units of X for week 10
    • Lead times are on the Excel sheet (given in the book)
  • Excel time!
lot sizing in mrp programs
Lot Sizing in MRP Programs
  • The default order size is Lot-for-lot (L4L)
  • However, for purchased items or for technical reasons, there may be minimum or maximum order sizes
  • Purchased items/subassemblies may require multiples of predetermined amounts (e.g., multiples of 50)
  • An example: Problem 5. Excel time.
  • Common lot-sizing methods are:
  • Economic order quantity (EOQ)
  • Least total cost (LTC)
  • Least unit cost (LUC)
  • Which one to use?
    • The one that is least costly!
mrp capacity requirements planning and mrp ii
MRP, Capacity Requirements Planning, and MRP II
  • Consider the expanded logic flow of MRP II.
  • When utilized cleverly:
  • It can be used to lower levels of in-process inventories (Lot-sizing?)
  • Ability to track material requirements
  • Ability to evaluate capacity requirements
  • The basic functions of the capacity requirements planning (CRP) system are:
    • To calculate the capacity needs based on the planned orders from MRP schedules
    • To compare the capacity required to the capacity available
  • Routing charts show the specific departments that each part goes through as well as setup and process times in those departments
  • Means of allocating production time
  • Ability to Simulate the manufacturing system
capacity requirements planning crp

A

B(2)

C(4)

C(2)

D(5)

Capacity Requirements Planning (CRP)
  • A small scale CRP example.
  • MPS for item A is:
    • 30, 24, 37 units for weeks 7, 8, and 10
  • Lead times for A, …, D are:
    • 1, 2, 3, and 1 week, respectively.
  • Routing chart for item A is:
    • Dept 4 (only)
    • Setup time is 2.0 hours
    • Processing time is 0.25 hours/unit.
  • The complete routing chart is available on the Excel file.
  • Group exercise: Complete the MRP schedules and compute work center load profiles
  • Excel time!