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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.

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Presentation Transcript
dependent versus independent demand

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

© 1998 by Prentice Hall, Inc.

A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

14-9

inputs to the production plan

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

© 1998 by Prentice Hall, Inc.

A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

14-10

the planning process
The Planning Process

Production Plan

Master Production

Schedule

Material

Requirements

Plan

Capacity

Requirements

Plan

No

Realistic??

Yes

Execute Capacity

Plans

Execute Material

Plans

© 1998 by Prentice Hall, Inc.

A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

14-12

material requirements planning mrp
Material Requirements Planning (MRP)
  • Manufacturing computer information system
  • Determines quantity & timing of dependent demand items

© 1995 Corel Corp.

© 1998 by Prentice Hall, Inc.

A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

14-18

mrp benefits
MRP Benefits
  • Increased customer satisfaction due to meeting delivery schedules
  • Faster response to market changes
  • Improved labor & equipment utilization
  • Better inventory planning & scheduling
  • Reduced inventory levels without reduced customer service

© 1998 by Prentice Hall, Inc.

A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

14-20

bill of material
Bill-of-Material
  • List of components & quantities needed to make product
  • Provides product structure (tree)
    • Parents: Items above given level
    • Children: Items below given level
  • Shows low-level coding
    • Lowest level in structure item occurs
    • Top level is 0; next level is 1 etc.

© 1998 by Prentice Hall, Inc.

A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

14-14

mrp and the production planning process

Aggregate

Forecast &

Resource

Production

Firm Orders

Availability

Planning

Material

Master

Production

Requirements

Scheduling

Planning

No, modify CRP, MRP, or MPS

Capacity

Shop

Requirements

Floor

Realistic?

Yes

Planning

Schedules

MRP and The Production Planning Process

© 1998 by Prentice Hall, Inc.

A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

14-22

time phased product structure
Time-Phased Product Structure
  • Purchasing - 1 week lead time, buys axles, wheels, bodies
  • Sub-assembly dept - 2 week lead time, 1 wheel, 1 axle makes a subassembly
  • Final assembly - 1 week lead time, body, 2 wheels, 2 axle subassembly
basic concepts
Basic Concepts
  • Start with a master schedule
  • MS is an overall production plan for finished goods (end items) over a planning horizon
  • Work backwards through the production process to raw materials and purchased parts, determining when and how much of each component
mrp plans
MRP Plans
  • Gross requirements = total demand in that period
  • Scheduled Receipt = previous orders made available in that period
  • Projected on hand = inventory at beginning of period