session 11 (material resource planning, tmh)

7/29/2019 Session 11 (Material Resource Planning, TMH)

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Materials Requirements

Planning(Session 11)

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Material Requirements Planning (MRP)

MRP Logic and Product Structure Trees

Time Fences

MRP Example

MRP II and Lot Sizing

Outline

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Material Requirements Planning Materials requirements planning (MRP) is a

means for determining the number of parts,components, and materials needed to produce

a product MRP provides time scheduling information

specifying when each of the materials, parts,and components should be ordered orproduced

Dependent demand drives MRP

MRP is a software system

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Example of MRP Logic and Product

Structure Tree

B(4)

E(1)D(2)

C(2)

F(2)D(3)

A

Product Structure Tree for Assembly A Lead TimesA 1 day

B 2 days

C 1 day

D 3 days

E 4 days

F 1 day

Total Unit Demand

Day 10 50 A

Day 8 20 B (Spares)

Day 6 15 D (Spares)

Given the product structure treefor A and the lead time anddemand information below, provide a materials requirements

plan that defines the number of units of each component and

when they will be needed

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LT = 1 day

Day: 1 2 3 4 5 6 7 8 9 10

A Required 50

Order Placement 50

First, the number of units of A are scheduled

backwards to allow for their lead time. So, in the

materials requirement plan below, we have to place

an order for 50 units of A on the 9th day to receive

them on day 10.

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Next, we need to start scheduling the components that make up

A. In the case of component B we need 4 Bs for each A.

Since we need 50 As, that means 200 Bs. And again, we back

the schedule up for the necessary 2 days of lead time.D a y : 1 2 3 4 5 6 7 8 9 1 0

A R e q u ir e d 5 0

O rd e r P la c e m e n t 5 0

B R e q u i re d 2 0 2 0 0

O rd e r P la c e m e n t 2 0 2 0 0

B(4)

E(1)D(2)

C(2)

F(2)D(3)

A

SparesLT = 2

4x50=200

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Day: 1 2 3 4 5 6 7 8 9 10

A Required 50

LT=1 Order Placement 50B Required 20 200

LT=2 Order Placement 20 200

C Required 100

LT=1 Order Placement 100

D Required 55 400 300

LT=3 Order Placement 55 400 300

E Required 20 200LT=4 Order Placement 20 200

F Required 200

LT=1 Order Placement 200

B(4)

E(1)D(2)

C(2)

F(2)D(3)

A

40 + 15 spares

Part D: Day 6

Finally, repeating the process for all components, we have the

final materials requirements plan:

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Master Production Schedule (MPS)

Time-phased plan specifying how manyand

whenthe firm plans to build each end item

Aggregate Plan

(Product Groups)

MPS

(Specific End Items)

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Types of Time Fences

Frozen No schedule changes allowed within this window

Moderately Firm

Specific changes allowed within product groups as

long as parts are available

Flexible

Significant variation allowed as long as overall

capacity requirements remain at the same levels

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Example of Time Fences

8 15 26

Weeks

FrozenModerately

Firm Flexible

Firm Customer Orders

Forecast and available

capacity

Capacity

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Material Requirements Planning

System

Based on a master production schedule, amaterial requirements planning system:

Creates schedules identifying the specific parts

and materials required to produce end items

Determines exact unit numbers needed

Determines the dates when orders for those

materials should be released, based on lead

times

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Firm orders

from known

customers

Forecasts

of demand

from random

customers

Aggregate

product

plan

Bill of

material

file

Engineering

design

changes

Inventory

record file

Inventory

transactions

Master production

Schedule (MPS)

Primary reportsSecondary reports

Planned order schedule for

inventory and production

control

Exception reports

Planning reports

Reports for performance

control

Material

planning

(MRP

computer

program)

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Bill of Materials (BOM) File Materials

Parts

Components

Production sequence

Modular BOM

Subassemblies Super BOM

Fractional options

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Inventory Records File

Each inventory item carried as a separate file

Status according to time buckets

Pegging

Identify each parent item that created demand

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Primary MRP Reports

Planned ordersto be released at a future time Order release noticesto execute the planned

orders

Changes in due datesof open orders due torescheduling

Cancellations or suspensionsof open orders due

to cancellation or suspension of orders on themaster production schedule

I nventory status data

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Secondary MRP Reports

Planning reports, for example, forecasting

inventory requirements over a period of time

Performance reportsused to determine

agreement between actual and programmedusage and costs

Exception reportsused to point out serious

discrepancies, such as late or overdue orders

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Additional MRP Scheduling

Terminology

Gross Requirements

Scheduled receipts

Projected available balance

Net requirements

Planned order receipt

Planned order release

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MRP Example

A(2) B(1)

D(5)C(2)

X

C(3)

Item On-Hand Lead Time (Weeks)

X 50 2

A 75 3

B 25 1

C 10 2

D 20 2

Requirements include 95 units (80 firm orders and 15 forecast) of X

in week 10

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A(2)

X

Day: 1 2 3 4 5 6 7 8 9 10

X Gross requirements 95

LT=2 Scheduled receipts

Proj. avail. balance 50 50 50 50 50 50 50 50 50 50

On- Net requirements 45

hand Planned order receipt 45

50 Planner order release 45

A Gross requirements 90


Proj. avail. balance 75 75 75 75 75 75 75 75




B Gross requirements 45

LT=1 Scheduled receiptsProj. avail. balance 25 25 25 25 25 25 25 25




C Gross requirements 45 40


Proj. avail. balance 10 10 10 10 10

On- Net requirements 35 40hand Planned order receipt 35 40

10 Planner order release 35 40

D Gross requirements 100


Proj. avail. balance 20 20 20 20 20 20 20




It takes2 As for

each X

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Day: 1 2 3 4 5 6 7 8 9 10





























B(1)A(2)

X

It takes

1 B for

each X

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A(2) B(1)

X

C(3)

It takes 3

Cs for

each A

Day: 1 2 3 4 5 6 7 8 9 10





























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A(2) B(1)

C(2)

X

C(3)

Day: 1 2 3 4 5 6 7 8 9 10





























It takes 2

Cs for

each B

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A(2) B(1)

D(5)C(2)

X

C(3)

Day: 1 2 3 4 5 6 7 8 9 10





























It takes 5

Ds for each

B

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Closed Loop MRP

Production Planning

Master Production Scheduling

Material Requirements Planning

Capacity Requirements Planning

Realistic?No

Feedback

Execute:

Capacity Plans

Material Plans

Yes

Feedback

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Manufacturing Resource Planning

(MRP II)

Goal: Plan and monitor all resources of a

manufacturing firm (closed loop):

manufacturing marketing

finance

engineering Simulate the manufacturing system

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Lot Sizing in MRP Programs

Lot-for-lot (L4L)

Economic order quantity (EOQ)

Least total cost (LTC)

Least unit cost (LUC)

Which one to use?

The one that is least costly!

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Numerical # 1:

Given the following product structure tree diagram, completethe MRP records for A, B, and C.

A

C B (2)

C

W k 4 5 6 7 8 9


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Gross 5 15 18 8 12 22

Scheduled

Receipt

PAB (21)

P.O.Receipt

P.O. Release

Gross 40 40 40

ScheduledReceipt 32

PAB (20)

P.O.Receipt

P.O. Release

PART A

Q=20; LT=1;

SS=0

Gross

Scheduled

Receipt

PAB (50)

P.O.Receipt

P.O. Release

PART BQ=40; LT=2;

SS=0

PART C

Q=L-4-L; LT=1;

SS=10

Week 4 5 6 7 8 9


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A

B(2) C (3)

F(2)D(2) E(2)

E(2)

D(2)G(1)

Numerical # 2:Draw the time-phased product structure tree.

Parts L.T.

A 1

B 2

C 1

D 1

E 2

F 3

G 2


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1 2 3 4 5 6 7 8

30

G

D

A

B

E

F

D

E

C

Time-phased product structure of A

Time in week


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Questions:

To ensure good master scheduling, a master

scheduler must do which of the

following?

Never lose sight of the aggregate plan

Identify and communicate all problems

Be involved with customer order

promising

Be visible to all levels of management


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The purpose of a time fence is which of

the following? Make sure the cows dont get out of

the barn

Control flow through the productionsystem

Maximize sales to retailers

All of the above

None of the above

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Which of the following is an objective under

an MRP system? To improve customer service

Minimize inventory investment

Maximize production operatingefficiency

All of the above

None of the above

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Which of the following is one of the three main

inputs into an MRP system?

BOM file

Exception report

Planning report

All of the above, None of the above

An MRP program accesses the status of a job

according to specific time periods called which of

the following?

a. Peg record

b. Time fence

c. Time bucket

d. Time clock, e. None of the above 34


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In MRP, workload per work center can be

determined. When the work capacity isexceeded, which of the following options can

be implemented to correct the imbalance of

workload? Work overtime

Renegotiate the due date and reschedule

Subcontract to an outside shop All of the above

None of the above

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Which of the following are reasons why a

Lot-For-Lot (L4L) method of lot sizing

can be used in an MRP application? Minimizes carrying costs

Sets planned orders to exactly match the

net requirements

Produces exactly what is needed

Does not carry any units over into future

periods

All of the above

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End of Session

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session 11 (material resource planning, tmh)

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