Fundamentals of MRP

Prof. Prasad Chakrabarti, CFPIM,CSCP(APICS)

Planning and Control System

Business Plan Production Plan Master Production Schedule Material Requirements Plan Production Activity Control and Purchasing Execution

Planning

Objectives of MRP

To determine the materials required

What is required How much is required When it is required

To establish and maintain priorities

Inputs to MRP Process

MPS

Inventory Status

MRP

Bill of Material

Planning Data

Nature of Demand

Table 100

Legs 206

Ends 433

Sides 711

Top 025

Hardware Kit 822

Bill of Materials

A bill of material lists all the components needed to make one assembly Each part has a unique part number

Description: Table Part Number: 100 Part Number Description 306 Wooden legs 433 Wooden ends 711 Wooden sides 025 Table top 822 Hardware

Quantity Required Unit of Measure 4 EA 2 EA 2 EA 1 EA 1 Kit

Bill of Materials
Single Level
Table 100

Base 300

Top 025

Hardware Kit 822

Table 100

Multilevel
Base 300 Top 025 Hardware Kit 822
Legs 306 Leg Bolts 326 Frame 357 Boards 031 Glue 075

The MRP Process

Determines

What is needed How much is needed When to order

MPS data Bills of material Inventory status Planning data

Involves

Lead Time, Exploding, and Offsetting

Lead time:

The time from when an order is placed until the part is ready for use
Multiplying the parent requirements by the usage quantity through the product tree Placing the requirements in their proper time periods based on lead time

Exploding:

Offsetting:

Planned Orders

Week Item Planned Order Number B Receipt Release Receipt C Release Receipt D Release Receipt E Release Receipt F Release 1 2 3 4 5 50

Gross and Net Requirements

Available inventory must be taken into account
Net requirements = gross requirements available inventory

Example:
Gross requirements Available inventory Net requirements 50 units 20 units 30 units

Problem 4.3
B C E
LT = 1 Wk LT = 2 Wks LT = 1 Wk

D
LT = 1 Wk

LT = 1 Wk

Item Number
Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release 20

1
20

2
20

Week 3
20

4
20

5
50 0 30 30

30 30 10

30 0 30 30

30

20 0 20 20 20

Problem 4.3 (Solution)

B C E
LT = 1 Wk LT = 2 Wks LT = 1 Wk

D
LT = 1 Wk

LT = 1 Wk

Item Number
Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release Gross requirements Projected available Net requirements Planned order receipt Planned order release 20

1
20

2
20

Week 3
20

4
20

5
50 0 30 30

10

10

10

10

30 30 0 20 20 30 0 30 30

20 0 0 0

30 20 0 20 20 20 20 0 20 20 20