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MATERIAL REQUIREMENT
PLANNING

MATERIAL REQUIEREMENT
PLANNING

Illustration of MRP
Record Processing
Technical Issues
The MRP System

Illustration of MRP
Developing material and capacity
plans is an iterative process where the
planning is carried out level by level.
For example, on a car manufacture,
planning a tire has to be done after
the planning for wheels.
If the company wants to build 10 cars
= 50 tires.
15 complete tires on hand
Needs 35 more tires
20 wheels already been ordered.
Only 15 more must be made to complete
those 10 cars.

Record Processing
Basic MRP Record,
The anticipated future usage or demand of the Item
during each period (Gross Requirement)
Existing Replenishment orders for the Item due in at
the beginning of each period (Scheduled Receipt)
The current and projected Inventory status for the
item at the end of each period (Projected Available
Balance)
Planned replenishment order for the Item at the
beginning of each period (Planned Order Release)

Record Processing
Time Bucket
The period of recording time

Planning Horizon
The number of period in the record

Time Phased
Is the gross requirement which stated on
a unique period by period basis.

Bill of Materials

Technical Issues
Regeneration
Processing all records in one computer.

Net Changes
Only those items that are affected by the
new or changed information are
reprocessed.

Safety Stock
Is a buffer of stock above and beyond that
needed to satisfy the gross requirement.

Safety Lead Time

Is a procedure whereby shop orders or
purchase orders are released and scheduled
to arrive one or more periods before
necessary to satisfy the gross requirement.

Technical Issues
Firm Planned Order (FPO)
Is a planned order that the MRP system does not
automatically change when condition change.

Service Parts
The service parts demand is typically based on
a forecast and is added directly into the gross
requirement for the part.

Scheduled Receipt vs. Planned Order

Release
The scheduled receipt represent a commitment,
where as the planned order is only a plan.
The scheduled receipt is far more difficult to
change.

The MRP System

Planner have the responsibility for
making detailed decision that keep the
material moving through the plant.
Primary action taken by MRP planner
1. Release order
2. Reschedule due date
3. Analyze and update system planning
factors
4. Reconcile errors or inconsistency
5. Find key problem areas to prevent future
crisis
6. Use the key system to solve critical material
shortage problems.
7. Indicate where further system enhancement
(output, diagnostic, etc)

The MRP System

Order Launching
Is the process of releasing orders to the
shop or vendors (Purchase Orders)

Allocation and Availability Checking

Allocation is a step prior to order
launching that involves an availability
check for the necessary components

Bottom Up Re-planning
Using pegging data to solve material
shortage problem.

SUMMARY
MATERIAL REQUIEREMENT
PLANNING
Illustration of MRP
Record Processing
Technical Issues
The MRP System

Thank You.
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