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Material Requirements Planning (MRP). Summary of Scheduling Process. FORECAST  ROUGH-CUT CAPACITY PLANNING  PRODUCTION PLAN  MASTER PRODUCTION SCHEDULE (MPS)  MATERIAL REQUIREMENTS PLANNING (MRP)  CAPACITY REQUIREMENTS PLANNING  

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summary of scheduling process
Summary of Scheduling Process

FORECAST

ROUGH-CUT CAPACITY PLANNING

PRODUCTION PLAN

MASTER PRODUCTION SCHEDULE (MPS)

MATERIAL REQUIREMENTS PLANNING (MRP)

CAPACITY REQUIREMENTS PLANNING



SHOP FLOOR CONTROLS VENDOR CONTROLS

slide3
MRP
  • Material Requirements Planning (MRP) – Translates MPS into Schedule of Component Requirements, Order Quantities, and Times
  • Manufacturing Resource Planning (MRP II) – Computes Resource Requirements, i. e. Labor
  • Enterprise Resource Planning (ERP) – Has Financial, Marketing, Etc. Components
nature of demand
Nature of Demand
  • Independent Demand – Demand Outside of Firm, on MPS (Vanilla Ice Cream)
  • Dependent Demand – Derived Demand within Firm (Cream, Vanilla Flavoring, Etc.)
mrp outputs objectives
MRP Outputs (Objectives)
  • Determine Requirements
    • What to Order
    • How Much to Order
    • When to Order
    • When to Schedule Delivery
  • Keep Priorities Current
mrp inputs
MRP Inputs
  • Master Production Schedule (MPS)
  • Bill of Materials (Parts List)
  • Inventory Status – On Hand
  • Lead Times
mrp example 1
MRP Example 1

The Protecto Corporation sells special survival kits to the visitors of Congress and the state legislatures. In April there are requirements for 1000 kits. Each kit contains:

two ear plugs

one bottle of extra strength aspirin

five paper gas masks

one box

one label

The firm only manufactures the ear plugs and the gas masks. The other parts are purchased. Each ear plug uses two ounces of wax and .08 hours of labor time. Each gas mask uses a sheet of cardboard, one-half ounce of wax, and .10 hours of labor.

component parts labor requirements
Component Parts & Labor Requirements

Ear Plugs (2 x 1000) = 2000

Aspirin (1 x 1000) = 1000

Gas Masks (5 x 1000) = 5000

Boxes (1 x 1000) = 1000

Labels (1 x 1000) = 1000

Cardboard (1 x 5000) = 5000

Wax (2 x 2000) + (.5 x 5000) = 6500

Labor Hours (.08 x 2000) + (.1 x 5000) = 660

cardboard sheets if 3 scrapped
Cardboard Sheets if 3% Scrapped

Adjustment for Scrap:

Scheduled Units = MRP / (1 – Scrap %)

Scheduled Units = 5000 / .97 = 5155

standard and actual labor time
Standard and Actual Labor Time

Standard Time = MRP / (1 - % Delay)

ST = 0.66 / 0.8 = 0.825 Hours

Actual Time = ST / Labor Efficiency

AT = 0.825 /.9 = 0.920 Hours

mrp example 2
MRP Example 2

In order to make one starship, you need 3 warp engines and 4 impulse engines. Each warp engine requires 10 dilithium crystals, 7 units of platinum, and 3 antimatter pods. Each impulse engine requires 2 antimatter pods and 4 units of platinum. The lead times are:

ItemLead Time

Starship (SS) 2 years

Warp Engine (WE) 3 years

Impulse Engine (IE) 1 year

Dilithium Crystal (DC) 2 years

Antimatter Pods (AM) 1 year

Platinum (PL) 2 years

The Federation has ordered 3 starships to be delivered in AD 2379.

mrp calculations
MRP Calculations

Starship: Lead Time 2 Years

Warp Engine: Lead Time 3 Years

mrp calculations15
MRP Calculations

Starship: Lead Time 2 Years

Impulse Engine: Lead Time 1 Year

mrp calculations16
MRP Calculations

Warp Engine: Lead Time 3 Years

Dilithium Crystal: Lead Time 2 Years

mrp calculations17
MRP Calculations:
  • Work from Top to Bottom of Product Structure Tree
  • Subtract Out Any Items On Hand
  • Combine Common Components – Put on the Same Table. If on the Same Square, Add.
mrp extensions
MRP Extensions:
  • Multiple Bills of Material
  • On Hand Quantities
  • On Order Quantities
  • Spare Parts
mrp example 3
MRP Example 3

A firm makes two products, A and R. A computer file reveals the following information about A and R, and their component parts:

ItemOn HandLead TimeMPSLot SizeOn Order

A 10 3 Weeks 160 (week 8) 1

B 0 2 Weeks 400

C 0 1 Week 400 (week 5) 1

D 200 3 Weeks 500

E 0 1 Week 1 200 (week 2)

R 20 3 Weeks 145 (week 7) 1

mrp calculations22
MRP Calculations

A: Lead Time 3 Weeks, Low-Level Code 0

D: Lead Time 3 Weeks, Low-Level Code 1

mrp calculations23
MRP Calculations

R: Lead Time 3 Weeks, Low-Level Code 0

B: Lead Time 2 Weeks, Low-Level Code 1

low level codes
Low Level Codes
  • Item E is What Low-Level Code?
  • Item C is What Low-Level Code?
  • Can You Do the MRP Tables for Items C and E?
material planners
Material Planners
  • People Who Manage MRP System
  • Release Manufacturing Orders (MO) or Purchasing Orders (PO)
  • Reschedule Due Dates of Open Orders as Needed
  • Reconcile Orders and Find Cause
  • Solve Shortages by Expediting
  • Coordinate with Others
material planner works with
Material PlannerWorks with:
  • Planned Orders
  • Released Orders
  • Firm Planned Orders
  • Exception Messages
  • Transaction Messages
material planner uses feedback for priorities
Material Planner UsesFeedback for Priorities
  • Suppliers Actions Through Purchasing
  • Early or Late Completions or Differing Quantities
  • Management Actions (Changing MPS)