chapter ii mrp

7/28/2019 Chapter II MRP

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MATERAIALS REQUIREMENT

PLANNING(MRP)

VENKATESWARA RAO .KORASIGA


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Dependent demand

lumpy

MRP

DETAILED SCHEDULE FOR

RAW MATERIALS

&

COMPONENTS

USED IN THE END PRODUCTS

MASTER SCHEDULE

FOR END ITEMS


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MRP Systems

Commonly used method in industry to coordinate the

production scheduling of end items and their associated subcomponents.

Fords MRP systems is known as CMMS, common

manufacturing management system.

Required information to support an MRP system:

Master Production Schedule (MPS)

Bill of Material (BOM)

Inventory Status Records by each part or component Lead times

Item master data


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C1 C2 C3 Cn

P1

P2

P3

PN

BASIC RAW MATERIAL

COMPONENTS

PRODUCTS


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MRP Systems

Master Production Schedule (MPS):

Example

Production of 1000 no. 12468 staplers is planned for weeks 1, 2, and 3,

followed by no more stapler production until week 6 in which 1500 staplers

will be produced.

Product: personal stapler no. 12468

1 2 3 4 5 6

Planned order releases 1000 1000 1000 0 0 1500

Week


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MRP Systems

Bill of Material (BOM): A listing of all components required for each end-

item.

Example personal stapler no. 12468. This stapler is assembled from 3

sub-assemblies.

Standard , Personal

Stapler

Base Assembly Top Jaw Bottom Jaw Top Assembly Pin Spring Assembly

Base

Plate

Base

Molding

Jaw

Support

Stake

Rivet

Tension

Plate

Top Top

Cover

Locator

Plate

Stake

Rivet

Pin Copper

Spring

Slide

Pin

Slide

Housing

2 2


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MRP Systems

Inventory Status Records: Dynamic information about the current level of

inventory for all components designated in the BOM of each end item. In

practice, accurate inventory levels are difficult to maintain.

Example Component Inventory Status

Top Assembly 1212Spring Assembly 1150

Locator Plate 146

Slide Pin 558


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MRP Systems

Lead Times: the time from when an order to replenish a part is initiated until

the part becomes available for use.

Lead times in practice are variable, but for the MPS, a fixed value is applied,

usually the mean plus some safety factor.

Example Component Lead Time (weeks)Top Assembly 1

Spring Assembly 1

Locator Plate 2

Slide Pin 1


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MRP Systems

Item Master Data - unique data for each part or component. This data

includes:

unique part number

annual demand

nominal order quantity cost

scrap rate

production lead time

resource requirements

pointers to engineering drawings (if produced internally)

vendor information (if purchased)etc


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MRP Systems

Requirements explosion and order release plan:

Example order release plan for personal stapler no. 12468

Level One Planning Top Assembly

0 1 2 3 4 5 6

Top Assembly: Lead time = 1

Gross Requirements 1000 1000 1000 1500

Scheduled Receipts

(Projected) On-hand 1212 212

Net Requirements 788 1000 1500

Planned Order Releases 788 1000 1500

Week


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MRP Systems



Level One Planning Spring Assembly

0 1 2 3 4 5 6

Spring Assembly: Lead time = 1


Scheduled Receipts


Net Requirements 850 1000 1500Planned Order Releases 850 1000 1500

Week


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MRP SystemsRequirements explosion and order release plan:

Ex. order release plan for personal stapler no. 12468, an order for 750 locator

plates is expected to arrive early in week 1

* The 892 units released in week 1 will not arrive till week 3 unless some

expedited actions occur

Level Two Planning Spring Assembly

0 1 2 3 4 5 6

Locator Plate: Lead time = 2

Gross Requirements 788 1000 1500

Scheduled Receipts 750


Net Requirements 892 1500Planned Order Releases 892* 1500

Week


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Ex. order release plan for personal stapler no. 12468, a batch of 650 slide

pins is just about complete.


0 1 2 3 4 5 6

Slide Pins: Lead time = 1




Net Requirements 642 1500

Planned Order Releases 642 1500

Week


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MRP Systems

Recall the requirements explosion and order release plan from Ex. order

release plan for personal stapler no. 12468

How might you allow for quality losses and or demand variability and lead-time

variability?

0 1 2 3 4 5 6



Scheduled Receipts




Week


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MRP SystemsScrap losses recall on the item master data record, quality yield is a field

which has been populated using historical data or a guess. If yield for the

stapler top assembly is say 90%, then more units should be planned for release

than are required for the planned end-items according to:

Ex. If there is a 90% yield for for top assembly then:

0 1 2 3 4 5 6

Top Assembly: Lead time = 1Gross Requirements 1000 1000 1000 1500

Scheduled Receipts




Yeild = 90%

yield

reqnetreleaseorder

.


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MRP SystemsSafety Stock and Safety Lead Time to protect against demand variability and

lead time variablity, a safety factor may be applied. Numerous application a

safety factors exist, the simplest may be multiply by some percentage.

Ex. If a 15% safety factor has been identified for top assembly then:

0 1 2 3 4 5 6


Scheduled Receipts




Safety facotr = 15%


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MRP Systems

Rough-Cut Capacity Planning:

When developing an MPS, one must consider if the schedule is feasible based

on the capacity of workcenters within the plant.

This is performed by determining the number of hours impact on all

workcenters required to produce the end item, and identified by time bucket.


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For example, suppose for every unit of end item A that is planned for

production, the following workcenters are impacted:

Part C has a 2-week lead time, and uses both workcenter 200 and 300. Part D

consists of part E which requires WC 300 and part F (a purchased component).

MRP Systems

C C

A

ED

F

-5 -4 -3 -2 -1 0

OP#1

WC200

.10 hr/unit

OP#2

WC300

.15 hr/unit

Purchased

WC200

.20 hr/unit

WC300

.15 hr/unit


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MRP SystemsRough-Cut Capacity Planning:

An aggregated, time phased profile for end item A and another end item B is

shown below.

End Item A End Item B

Period Period

Workcenter 0 -1 -2 0 -1 -2

100 0.05 0.05

200 0.2 0.1 0.2 0.2

300 0.15 0.15 0.3 0.15

Aggregated time-phased load profiles for end items (Hrs/Unit)


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Given a master production schedule for the facility:

And the time-phased load profile, results in the total resource requirements

End Item 1 2 3 4 5 6

A 50 75 25 50 200B 75 125 100 150

Period

Workcenter -1 0 1 2 3 4 5 6

100 6.25 3.75 7.5 7.5 10 7.5

200 20 32.5 42.5 55 50 70 30

300 18.75 41.25 33.75 63.75 67.5 52.5 45

Period


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MRP Systems

Master Production Schedule (MPS):

Example

Production of 1000 no. 12468 staplers is planned for weeks 1, 2, and 3,

followed by no more stapler production until week 6 in which 1500 staplers

will be produced.

Product: personal stapler no. 124681 2 3 4 5 6

Planned order releases 1000 1000 1000 0 0 1500

Week


22/43

MRP Systems

Bill of Material (BOM): A listing of all components required for each end-

item.

Example personal stapler no. 12468. This stapler is assembled from 3

sub-assemblies.

Standard , Personal

Stapler

Base Assembly Top Jaw Bottom Jaw Top Assembly Pin Spring Assembly

Base

Plate

Base

Molding

Jaw

Support

Stake

Rivet

Tension

Plate

Top Top

Cover

Locator

Plate

Stake

Rivet

Pin Copper

Spring

Slide

Pin

Slide

Housing

2 2


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MRP Systems

Inventory Status Records: Dynamic information about the current level of

inventory for all components designated in the BOM of each end item. In

practice, accurate inventory levels are difficult to maintain.

Example Component Inventory Status

Top Assembly 1212Spring Assembly 1150

Locator Plate 146

Slide Pin 558


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MRP Systems

Lead Times: the time from when an order to replenish a part is initiated until

the part becomes available for use.

Lead times in practice are variable, but for the MPS, a fixed value is applied,

usually the mean plus some safety factor.

Example Component Lead Time (weeks)Top Assembly 1

Spring Assembly 1

Locator Plate 2

Slide Pin 1


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MRP Systems

Item Master Data - unique data for each part or component. This data

includes:

unique part number

annual demand

nominal order quantity cost

scrap rate

production lead time

resource requirements

pointers to engineering drawings (if produced internally)

vendor information (if purchased)etc


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MRP Systems



Level One Planning Top Assembly

0 1 2 3 4 5 6



Scheduled Receipts



Week


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MRP Systems



Level One Planning Spring Assembly

0 1 2 3 4 5 6

Spring Assembly: Lead time = 1


Scheduled Receipts



Week


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Ex. order release plan for personal stapler no. 12468, an order for 750 locator

plates is expected to arrive early in week 1

* The 892 units released in week 1 will not arrive till week 3 unless some

expedited actions occur


0 1 2 3 4 5 6

Locator Plate: Lead time = 2




Net Requirements 892 1500Planned Order Releases 892* 1500

Week


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Ex. order release plan for personal stapler no. 12468, a batch of 650 slide

pins is just about complete.


0 1 2 3 4 5 6

Slide Pins: Lead time = 1




Net Requirements 642 1500

Planned Order Releases 642 1500

Week


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MRP Systems

Recall the requirements explosion and order release plan from Ex. order

release plan for personal stapler no. 12468

How might you allow for quality losses and or demand variability and lead-time

variability?

0 1 2 3 4 5 6



Scheduled Receipts




Week


31/43

MRP SystemsScrap losses recall on the item master data record, quality yield is a field

which has been populated using historical data or a guess. If yield for the

stapler top assembly is say 90%, then more units should be planned for release

than are required for the planned end-items according to:

Ex. If there is a 90% yield for for top assembly then:

0 1 2 3 4 5 6


Scheduled Receipts




Yeild = 90%

yield

reqnetreleaseorder .


32/43

MRP SystemsSafety Stock and Safety Lead Time to protect against demand variability and

lead time variablity, a safety factor may be applied. Numerous application a

safety factors exist, the simplest may be multiply by some percentage.

Ex. If a 15% safety factor has been identified for top assembly then:

0 1 2 3 4 5 6


Scheduled Receipts




Safety facotr = 15%


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MRP Systems


When developing an MPS, one must consider if the schedule is feasible based

on the capacity of workcenters within the plant.

This is performed by determining the number of hours impact on all

workcenters required to produce the end item, and identified by time bucket.


34/43


For example, suppose for every unit of end item A that is planned for

production, the following workcenters are impacted:

Part C has a 2-week lead time, and uses both workcenter 200 and 300. Part D

consists of part E which requires WC 300 and part F (a purchased component).

MRP Systems

C C

A

ED

F

-5 -4 -3 -2 -1 0

OP#1

WC200

.10 hr/unit

OP#2

WC300

.15 hr/unit

Purchased

WC200

.20 hr/unit

WC300

.15 hr/unit


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An aggregated, time phased profile for end item A and another end item B is

shown below.

End Item A End Item B

Period Period

Workcenter 0 -1 -2 0 -1 -2

100 0.05 0.05

200 0.2 0.1 0.2 0.2

300 0.15 0.15 0.3 0.15

Aggregated time-phased load profiles for end items (Hrs/Unit)


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Given a master production schedule for the facility:

And the time-phased load profile, results in the total resource requirements

End Item 1 2 3 4 5 6

A 50 75 25 50 200B 75 125 100 150

Period

Workcenter -1 0 1 2 3 4 5 6

100 6.25 3.75 7.5 7.5 10 7.5

200 20 32.5 42.5 55 50 70 30

300 18.75 41.25 33.75 63.75 67.5 52.5 45

Period


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Given this rough cut capacity plan, and the knowledge that you operate a single

shift 10 hours a day, and 6 days a week, do you foresee a problem? If so, how

might you adjust?

Workcenter -1 0 1 2 3 4 5 6

100 6.25 3.75 7.5 7.5 10 7.5

200 20 32.5 42.5 55 50 70 30

300 18.75 41.25 33.75 63.75 67.5 52.5 45

Period


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MRP SystemsCapacity Requirements Planning (CRP):

Similar to rough cut capacity planning, but includes details such as current

inventory levels and the impact of lot-sizing decisions.

Ex. Assume initial inventory levels:

Then net MPS becomes:

On-Hand Inventory

A 100

B 125

End Item 1 2 3 4 5 6

A 25 25 50 200

B 75 100 150

Period


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MRP SystemsCapacity Requirements Planning:

From the net MPS, the workstation loading levels by part:

Therefore capacity plan is:

Are there any concerns?

0 1 2 3 4 5 6

WC100-A 1.25 1.25 2.5 3 12 10 0

WC200-A 0 5 7.5 22.5 0 0 0WC300-A 0 3.75 7.5 11.25 45 20 0

WC100-B 0 3.75 5 0 37.5 30 0

WC200-B 0 0 15 35 7.5 0 30

WC300-B 0 0 22.5 41.25 20 30 22.5

Period

0 1 2 3 4 5 6

WC100 1.25 5 7.5 3 49.5 40 0

WC200 0 5 22.5 57.5 7.5 0 30

WC300 0 3.75 30 52.5 65 50 22.5

Period


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MRP Systems

Master Production Schedule (MPS): Planned production quantities for end-

items in each time period of the planning horizon.

Planning horizon length of time over which to plan the production

schedule. This length of time must exceed the cumulative lead time to

replenish an end-item through all production stages.

Time period (or time bucket) smallest unit of time in which end-item

production is schedule. In practice, time buckets of one week are typical

used.

EVOLUTION OF MRP


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EVOLUTION OF MRP

Manufacturing

ResourcePlanning

Links up the closed loop MRP system with the financial

systems of the company

(Links functions

-Capacity planning

-Inventory management

-Shop floor control

-MRP)

Improved

computational

efficiency of

computers

Unrealistic M/c

schedules, ignoring

plant capacities

Not only plans prioritiesbut provides feedback to

executing the priority plan

AN IMPROVED ORDERING METHOD

PRIORITY PLANNING

CLOSED LOOP MRP

MRP II


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Gross & Net requirements

report

Capacity vs

Load report

Shop floor

Planning

report

Production Order

Status & exceptions

report

Service

Parts

requirements

Sales

forecasts

Customer

orders

Inventory

transactions

Master

Production

schedule

Engg.

changes

InventoryRecord

file

MRP

PROCESSOR

Bill ofMaterials

file

OUT PUT

REPORTS


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chapter ii mrp

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