chapter fourteen material requirements planning chapter 14 material requirements planning
TRANSCRIPT
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
MTSU Management 362 14-2
Independent Demand(Chapter 13)
A
B(4) C(2)
D(2) E(1) D(3) F(2)
Dependent Demand(Chapter 14)
Independent demand is uncertain. Dependent demand is certain.
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Dependent Demand vs Independent Demand
Time
Time Time
Time
Dem
and
Dem
and
Stable demand“Lumpy” demand
Am
ou
nt
on
han
d
Am
ou
nt
on
han
d
Safety stock
Figure 14-1
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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MRP Inputs MRP Processing MRP Outputs
Masterschedule
Bill ofmaterials
file
Inventoryrecords
file
MRP computerprograms
Changes
Order releases
Planned-orderschedules
Exception reports
Planning reports
Performance-controlreports
Inventorytransaction
Primaryreports
Secondaryreports
Figure 14-2
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Inventory Records File• A computerized file with a complete record of
each material (part number) held in inventory
• Provides current status and planning factors used by MRP– quantity currently on hand (perpetual inventory)– quantities on order and delivery dates– customer orders (service parts)– lot size– lead time– safety stock level– scrap rate
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Master Schedule
• States which end items (finished goods) are to be produced, when these are needed, and in what quantities
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Bill-of-Materials
• A listing of all of the raw materials, parts, subassemblies, and assemblies needed to produce one unit of a finished product
• Typically shown a product tree structure where all components and their relationships are listed by levels
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Chair
Seat
Legs (2)Cross
barSide
Rails (2)Cross
barBack
Supports (3)
LegAssembly
BackAssembly
Level 0
1
2
3
Figure 14-5
Product Structure Tree
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Netting Process
ItemChair
Leg Assembly
Seat
Back Assembly
Leg
Cross Bar
Side Rail
Back Support
Amount on hand10
5
7
2
8
14
12
20
Assume the following on-hand amountsfor each item
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Planning Horizon
• Cumulative lead time: The sum of the lead times that sequential phases of a process require, from ordering of parts or raw materials to completion of final assembly.
• Time fences: Series of time intervals during which order changes are allowed or restricted (see Figure 12-12, page 548).
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Netting Process
ItemChair
Leg Assembly
Seat
Back Assembly
Leg
Cross Bar
Side Rail
Back Support
Lead time1
1
1
2
1
1
1
2
Assume the following lead timesfor each item
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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1 2 3 4 5
Procurement ofback supports
Procurementof seat
Back assembly
Legassembly
Assembly Time Chart
Procurementof cross bar
Place orderwith supplier
0
Procurementof side rails
Procurementof cross bar
Procurementof front legs
Final assemblyand inspectionof chair
Release orderto department
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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The MPS is converted into the gross requirements for each component for each time period (time bucket) in the planning horizon using the bill of materials.
MRP Logic
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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The scheduled receipts are orders that have been placed and are on the way. It is assumed that receipts arrive and are available at the beginning of a time period.
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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The initial inventory is added to period 1’s scheduled receipts and placed in period 1 of the projected on hand line. In this case, assume that the initial inventory is 16. Add period 1’s scheduled receipt (7) and initial inventory (16) to obtain the projected on hand amount for period 1 (23).
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Subtract the projected on hand amount for period 1 (23) from period 1’s gross requirement (10) to find the net requirement (-13).
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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If the net requirement is negative or zero, that amount (13) is added to the period 2’s scheduled receipt (9) to find the period 2’s projected on hand amount (22).
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Subtract the projected on hand amount for period 2 (22) from period 2’s gross requirement (15) to find the net requirement (-7).
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
-7
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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If the net requirement is negative or zero, that amount (7) is added to the period 3’s scheduled receipt (0) to find the period 3’s projected on hand amount (7).
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
-7
7
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Subtract the projected on hand amount for period 3 (7) from period 3’s gross requirement (20) to find the net requirement (13). If the net requirement is positive, an order receipt must be planned to cover that amount.
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
-7
7
13
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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If lot-for-lot lot sizing is being used, the planned order receipt is equal to period 3’s net requirement.
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
-7
7
13
13
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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The planned order receipt is then offset (moved forward in time) to allow for the lead time. This is the planned order release.
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
-7
7
13
13
13
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Repeat the steps for period 4.
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
-7
7
13
13
13
12
12
12
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Repeat the steps for period 5
1 2 3 4 5
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
Item
10 15 20 12 5
7 9
23
-13
22
-7
7
13
13
13
12
12
12
5
5
5
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Bill of Materials
A
B(2) C(3)
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Assumptions
Master production schedule: 100 in week 5
Item On hand Lead Time Scheduled Receipts
A 15 1 0
B 20 2 0
C 10 1 15 in wk 2
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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MRP Dynamics
• Modes of operation– regenerative - batch mode– net change - on-line, real time mode
• System nervousness - frequent changes of inputs to a net change MRP system
• Pegging - tracing upward in the BOM from the component to all of the parent items
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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MRP Outputs
• Planned orders - schedule indicating the amount and timing of future orders.
• Order releases - authorization for the execution of planned orders.
• Changes - revisions of due dates or order quantities, or cancellations of orders.
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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MRP Secondary Reports
• Performance-control reports
• Planning reports
• Exception reports
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Other Considerations
• Safety Stock
• Lot sizing– Lot-for-lot ordering– Economic order quantity– Fixed-period ordering– Part-period model
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Capacity Planning
• Capacity requirements planning: The process of determining short-range capacity requirements.
• Load reports: Department or work center reports that compare known and expected future capacity requirements with projected capacity availability.
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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MRP PlanningDevelop a tentativemaster production
schedule
Develop a tentativemaster production
schedule
Use MRP tosimulate material
requirements
Use MRP tosimulate material
requirements
Convert materialrequirements to
resource requirements
Firm up a portionof the MPS
Is shopcapacity
adequate?
Cancapacity be
changed to meetrequirements
Revise tentativemaster production
schedule
Changecapacity
Yes
No
Yes
No
Figure 14-17
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Benefits of MRP
• Low levels of in-process inventories
• Ability to track material requirements
• Ability to evaluate capacity requirements
• Means of allocating production time
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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Desirable Characteristics for MRP Implementation (1 of 2)
• An effective computer system
• Accurate computerized bills of material and inventory status files
• Manufactures discrete products that are processed through many production steps
• Processes requiring long processing times
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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• Relatively reliable and stable lead times
• Master schedule frozen for a period of time sufficient to procure materials without expediting and confusion
• Top management support and commitment
Desirable Characteristics for MRP Implementation (2 of 2)
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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• Expanded MRP with and emphasis placed on integration– Financial planning– Marketing– Engineering– Purchasing– Manufacturing
MRP II
CHAPTER FOURTEENMATERIAL REQUIREMENTS PLANNING
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MarketDemand
Production
plan
Production
plan
Problems?Problems?
Rough-cutcapacity planning
Rough-cutcapacity planning
Yes No YesNo
Finance
Marketing
Manufacturing
Adjustproduction plan
Adjustproduction plan
Masterproduction schedule
Masterproduction schedule
MRP
Capacityplanning
Problems?Requirementsschedules
Requirementsschedules
Ad
just
mas
ter
sch
edu
le
Figure 14-19