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Overview. Dependent demand Master production schedule Bill of materials MRP Time-phased product structure Gross material requirements plan Net requirements plan Lot-sizing techniques Extensions of MRP. Furniture Mfg. Produces 3-types of chairs Ladder-back chair Kitchen chair

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Overview
Overview

  • Dependent demand

  • Master production schedule

  • Bill of materials

  • MRP

    • Time-phased product structure

    • Gross material requirements plan

    • Net requirements plan

  • Lot-sizing techniques

  • Extensions of MRP


Furniture mfg
Furniture Mfg.

  • Produces 3-types of chairs

    • Ladder-back chair

    • Kitchen chair

    • Desk chair


Master production schedule

Master Production Schedule

April

May

1

2

3

4

5

6

7

8

Ladder-back chair

150

150

Kitchen chair

120

120

Desk chair

200

200

200

200

Aggregate

production plan

670

670

for chair family


Bill of materials
Bill of Materials

  • List of components & quantities needed to make product

  • Provides product structure (tree)

    • Parents: Items above given level

    • Children: Items below given level


Bill of materials1

Bill of Materials

Back slats

Seat cushion

Leg supports

Seat-frame boards

Back legs

Front legs

A

Ladder-back chair


Bill of materials2

A

Ladder-back

chair

Back slats

Seat cushion

B (1)

Ladder-back

subassembly

C (1)

Seat

subassembly

D (2)

Front

legs

E (4)

Leg

supports

Leg supports

Seat-frame boards

F (2)

Back

legs

G (4)

Back

slats

H (1)

Seat

frame

I (1)

Seat

cushion

Back legs

Front legs

A

Ladder-back chair

J (4)

Seat-frame

boards

Bill of Materials


Dependent vs independent demand
Dependent vs. Independent Demand

  • Demand for chairs

    • A finished product

    • Independent

  • Demand for front legs

    • A component or subassembly

    • Depends on the demand for chairs (parent)


Dependent vs independent demand1
Dependent vs. Independent Demand

Materials With

Materials With

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 & POQ

MRP

Method


Requirements for effective use of dependent demand inventory models
Requirements for Effective Use of Dependent Demand Inventory Models

  • master production schedule

  • specifications or bills-of-material

  • inventory availability

  • purchase orders outstanding

  • lead times


Cooperstown cars inc
Cooperstown Cars, Inc. Models

  • Produces toy cars

    • Body

    • Axles (2)

    • Wheels (4)


Cooperstown cars inc1
Cooperstown Cars, Inc. Models

- Each component has a known lead time


Cooperstown cars inc2
Cooperstown Cars, Inc. Models

  • Demand for Toy Car in Week 8 is 100

  • Schedule production for:

    • Toy car assembly

    • Wheel assembly

    • Body

    • Axle

    • Wheels










More complexity/Scheduled receipts Models

Explanation:

Gross requirements are the total demand for wheels. Projected on-hand inventory in week 1 is 30 + 200 – 150


Scheduled or planned receipts in week Modelst

Projected on-hand inventory balance at end of week t

Inventory on hand at end of week t - 1

Gross requirements in week t

=

+

More complexity/Scheduled receipts



Lot sizing rules

Lot-Sizing Rules Models

  • When there is a net requirement, how much should we order?

  • Lot-for-lot – L4L

  • Economic Order Quantity – EOQ

  • Part Period Balancing - PPB

  • Wagner-Whitin Algorithm


Lot-Sizing Rules: L4L Models

L4L- order the amount needed to fulfill requirements





Lot-Sizing Rules: EOQ Models

EOQ- order the EOQ


Lot-Sizing Rules: EOQ Models

EOQ- order the EOQ


Lot-Sizing Rules: EOQ Models

EOQ- order the EOQ

80+116-120 = 76


Lot-Sizing Rules: EOQ Models

EOQ- order the EOQ


Lot-Sizing Rules: EOQ Models

EOQ- order the EOQ


Lot-Sizing Rules: EOQ Models

EOQ- order the EOQ


Mrp ii

MRP II Models


Customer orders Models

Forecasts

Master production schedule

Bills of materials

Routings

Time standards

Inventory records Inventory transactions

MRP

explosion

MRP II


Mrp ii1

Customer orders Models

Forecasts

Master production schedule

Bills of materials

Routings

Time standards

Inventory records Inventory transactions

MRP

explosion

Material requirements plan

MRP II


Mrp ii2

Customer orders Models

Forecasts

Master production schedule

Bills of materials

Routings

Time standards

Inventory records Inventory transactions

MRP

explosion

Material requirements plan

Cost and

financial data

Manufacturing resource plan

MRP II


Mrp ii3

Customer orders Models

Forecasts

Master production schedule

Bills of materials

Routings

Time standards

Inventory records Inventory transactions

MRP

explosion

Material requirements plan

Cost and

financial data

Manufacturing resource plan

Purchasing reports

Financial/ accounting reports

Sales and marketing reports

Human resource reports

Manufacturing reports

MRP II


Extensions to mrp enterprise resource planning
Extensions to MRP ModelsEnterprise Resource Planning

MRP II with ties to customers and suppliers


Mrp and erp
MRP and ERP Models



Product
Product Models

  • BMW X5 sport activity vehicle

  • Application: mySAP™ Automotive

  • Goal:

    • Tight supplier network in order to ensure just-in-time production

    • Compress Customer Order Cycle

    • Improve Inventory Accuracy


Why use erp
Why use ERP Models

  • Automotive Industry is competitive

  • Global competition

  • Trend toward make-to-order manufacturing -- filling individual customer requirements rather than make-to-stock new demands on manufacturers and dealers

  • Potential cost reduction

  • Customers want what they want, when they want it.


Key success factors in the automotive industry
Key success factors in the Automotive Industry Models

  • Speed: speed in product development, speed in product assembly, and speed in product delivery to dealers and customers.

  • Manufacturers must closely manage armies of suppliers and partners to make certain that the correct systems and components are delivered where and when they are needed.

  • Collaboration among all the industry players -- suppliers, OEMs, dealers, and customers -- is essential.

  • Linking complex business processes into a logical flow, maximizing efficiency and satisfying customers' expectations.


Business benefits
Business Benefits Models

  • End-to-end integration of SAP and non-SAP products.

  • Offers a single data platform for

    • Engineering

    • Planning

    • supply chain management

    • Procurement

    • customer relationship management.


Business benefits1
Business Benefits Models

  • Cost reduction of 3% to 6% per vehicle

    • by changing the supply chain from the traditional push paradigm

    • New level of collaboration and efficiency.

  • Groups processes and functions by market segments

    • OEMs, suppliers and aftermarket, or sales and service.


How it works
How it works Models

  • mySAP™ Automotive generates delivery schedules to meet assembly-line planning and sequencing directives.

  • Long-horizon forecasts and short-horizon J-I-T delivery schedules are sent to suppliers.

    • Electronic Data Interchange (EDI)

    • mySAP™ Automotive Supplier Portal (Internet)


How it works1
How it works Models

  • BMW gets an advance shipping notification

    • Exact information on part counts and delivery dates

  • Upon receipt parts are transferred directly to the line


Additional benefits
Additional benefits Models

  • Monitoring the production status in real time

  • Recording production confirmation and parts consumption every 3 minutes and adjustment of inventory

  • Costs are posted to calculate the value of work in progress

  • Seamless collaboration between business partners across the supply chain allows

    • Engineering

    • High-volume production

    • Highly customized products


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