Rama MRP
Rama MRP
Rama MRP
Dependent Demand
C(2)
B(4)
D(2)
E(1)
D(3)
F(2)
Dependent Demand
Dependent demand: Demand for items that are
subassemblies or component parts to be used in
production of finished goods.
Once the independent demand is known, the dependent
demand can be determined.
Demand Characteristics
Independent demand
Dependent demand
100 x 1 =
100 tabletops
100 tables
Continuous demand
Discrete demand
400
300
No. of tables
No. of tables
400
200
100
1
3
Week
300
200
100
5
M T W Th F
M T W Th F
Aggregate
production
plan
Firm orders
from known
customers
Engineering
design
changes
Master production
Schedule (MPS)
Bill of
material
file
Material
planning
(MRP
computer
program)
Forecasts
of demand
from random
customers
Inventory
transactions
Inventory
record file
Secondary reports
Primary reports
Planned order schedule for
inventory and production
control (work orders,
purchase orders),
rescheduling notices
Exception reports
Planning reports
Reports for performance
control
The McGraw-Hill Companies, Inc., 2004
MRP System
MRP Inputs
MRP Processing
MRP Outputs
Changes
Order releases
Master
schedule
Planned-order
schedules
Primary
reports
Bill of
materials
Inventory
records
MRP computer
programs
Exception reports
Planning reports
Secondary
reports
Performancecontrol
reports
Inventory
transaction
MRP Inputs 1:
Master Production Schedule
Drives MRP process with a schedule of finished products;
states which end items are to be produced, when these
are needed, and in what quantities.
Quantities may consist of a combination of customer
orders & demand forecasts
Quantities represent what needs to be produced, not what
can be produced
MPS
(Specific End Items)
Chair
Leg
Assembly
2 Legs (2)
Cross
bar
Seat
Back
Assembly
Side Cross
Back
Rails (2) bar Supports (3)
Wheels (2)
P/N 1003
Frame (1)
P/N 1004
Pivot (1)
Spring (1)
Rivets (2)
Finished clipboard
Pressboard (1)
Pressboard
(1)
Top Clip
(1)
Level 0
Clip Assy
(1)
Bottom Clip
(1)
Rivets
(2)
Pivot
(1)
Level 1
Spring
(1)
Level 2
MRP Terminology (1 of 3)
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases
MPR Terminology (2 of 3)
Gross requirements
Total expected demand
Scheduled receipts
Open orders scheduled to arrive
Projected on hand
Planned-order releases
Planned amount to be ordered in each time period
Final assembly
and inspection
Procurement of
part H
Fabrication
of part G
Procurement of
raw material I
Subassembly B
10
11
Weeks
S
C
10 11
15
Periods
6 7
40
Periods
Gross requirements: B
8
50
10
40+10
= 50
40 50 20
9 10 11 12 13
40
20
30
7
15+30
= 45
Master schedule
for S sold directly
1 2
10 10
Gross Requirements
Scheduled Receipts
Projected on Hand
Net Requirements
Planned Order
Receipts
Planned Order
Releases
Beg Inv
PERIOD
2
3
4
MRP Processing:
Example 1-School Mate Products
Clipboard
Lapdesk
85
0
95
60
120
0
100
60
100
0
CLIPBOARD
25
175 (Period 1)
LAPDESK
20
0
PRESSBOARD
150
0
0
L4L
1
0
Mult 50
1
1
Min 100
1
Clipboard
Level 0
Clip Assy
(1)
Pressboard
(1)
Rivets
(2)
Level 1
Lapdesk
Pressboard
(2)
Trim
(3)
Level 0
Beanbag
(1)
Glue
(4 oz)
Level 1
LLC: 0
Gross Requirements
85
95
120
100
100
Scheduled Receipts
175
Projected on Hand
Net Requirements
Planned Order Receipts
Planned Order Releases
LT: 1
PERIOD
25
LLC: 0
Gross Requirements
85
95
120
100
100
Scheduled Receipts
175
Projected on Hand
Net Requirements
LT: 1
PERIOD
25
115
0
LLC: 0
Gross Requirements
85
95
120
100
100
Scheduled Receipts
175
Projected on Hand
Net Requirements
LT: 1
PERIOD
25
115
20
LLC: 0
Gross Requirements
85
95
120
100
100
Scheduled Receipts
175
115
20
100
Projected on Hand
Net Requirements
LT: 1
PERIOD
25
100
100
20 units available
(20 - 120) = -100 100 additional Clipboards are required
Order must be placed in Period 2 to be received in Period 3
LLC: 0
Gross Requirements
85
95
120
100
100
Scheduled Receipts
175
115
20
100
100
100
100
100
100
100
100
Projected on Hand
Net Requirements
LT: 1
PERIOD
25
100
LLC: 0
LT: 1
Gross Requirements
Net Requirements
Planned Order Receipts
Planned Order Releases
2
0
Scheduled Receipts
Projected on Hand
PERIOD
20
60
4
0
60
5
0
LLC: 0
LT: 1
Gross Requirements
PERIOD
1
60
60
20
10
10
40
50
50
50
Scheduled Receipts
Projected on Hand
Net Requirements
20
50
50
LLC: 0
LT: 1
LLC: 0
LT: 1
PERIOD
3
100
100
100
PERIOD
3
50
50
PERIOD
3
LLC: 0
LT: 1
LLC: 0
LT: 1
PERIOD
3
100
100
100
x1
x1
PERIOD
3
x1
1
50
x2
1
100
50
x2
PERIOD
2
3
4
100
200
100
5
0
LLC: 0
LT: 1
LLC: 0
LT: 1
PERIOD
3
100
100
100
PERIOD
3
50
50
1
100
PERIOD
2
3
4
100
200
100
50
100
50
50
100
150
0
150
150
100
0
100
100
5
0
0
PERIOD
ITEM
Clipboard
Lapdesk
Pressboard
50
100
100
100
50
100
100
150
MRP Processing:
Example 2
Item
X
A
B
C
D
X
A(2)
C(3)
B(1)
C(2)
D(5)
A(2)
It takes
2 As for
each X
X
LT=2
Onhand
50
A
LT=3
Onhand
75
B
LT=1
Onhand
25
C
LT=2
Onhand
10
D
LT=2
Onhand
20
Day:
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
10
95
50 50
50
50
50
50
50
50
50
50
45
45
45
90
75 75
75
75
75
75
75
75
15
15
15
45
25 25
25
25
25
25
20
40
45
10 10
10
10
35
25
10
35
35
40
40
40
100
20 20
20
20
20
80
20
20
80
80
25
20
20
X
LT=2
A(2)
B(1)
It takes
1 B for
each X
Onhand
50
A
LT=3
Onhand
75
B
LT=1
Onhand
25
C
LT=2
Onhand
10
D
LT=2
Onhand
20
Day:
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
10
95
50 50
50
50
50
50
50
50
50
50
45
45
45
90
75 75
75
75
75
75
75
75
15
15
15
45
25 25
25
25
25
25
20
40
45
10 10
10
10
35
25
10
35
35
40
40
40
100
20 20
20
20
20
80
20
20
80
80
25
20
20
X
LT=2
A(2)
C(3)
It takes 3
Cs for
each A
B(1)
Onhand
50
A
LT=3
Onhand
75
B
LT=1
Onhand
25
C
LT=2
Onhand
10
D
LT=2
Onhand
20
Day:
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
10
95
50 50
50
50
50
50
50
50
50
50
45
45
45
90
75 75
75
75
75
75
75
75
15
15
15
45
25 25
25
25
25
25
20
40
45
10 10
10
10
35
25
10
35
35
40
40
40
100
20 20
20
20
20
80
20
20
80
80
25
20
20
X
LT=2
A(2)
C(3)
B(1)
C(2)
It takes 2
Cs for
each B
Onhand
50
A
LT=3
Onhand
75
B
LT=1
Onhand
25
C
LT=2
Onhand
10
D
LT=2
Onhand
20
Day:
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
10
95
50 50
50
50
50
50
50
50
50
50
45
45
45
90
75 75
75
75
75
75
75
75
15
15
15
45
25 25
25
25
25
25
20
40
45
10 10
10
10
35
25
10
35
35
40
40
40
100
20 20
20
20
20
80
20
20
80
80
25
20
20
X
LT=2
A(2)
C(3)
B(1)
C(2)
D(5)
It takes 5
Ds for each
B
Onhand
50
A
LT=3
Onhand
75
B
LT=1
Onhand
25
C
LT=2
Onhand
10
D
LT=2
Onhand
20
Day:
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
Gross requirements
Scheduled receipts
Proj. avail. balance
Net requirements
Planned order receipt
Planner order release
10
95
50 50
50
50
50
50
50
50
50
50
45
45
45
90
75 75
75
75
75
75
75
75
15
15
15
45
25 25
25
25
25
25
20
40
45
10 10
10
10
35
25
10
35
35
40
40
40
100
20 20
20
20
20
80
20
20
80
80
25
20
20
MRP Outputs
Planned orders (schedule indicating the amount and
timing of orders)
Work orders
Purchase orders
Order releases (authorization for the execution of
planned orders)
Changes to previous plans or existing schedules
(revision of due dates or order quantities, or
cancellations of orders)
Action notices
Rescheduling notices
Other Considerations
Safety Stock
Lot sizing
Lot-for-lot ordering (L4L)
Economic order quantity
Part Period Balancing
Wagner-Whitin algorithm
& others
Benefits of MRP
Reduced inventories without reduced customer service
Ability to track material requirements
Ability to evaluate capacity requirements
Means of allocating production time
Increased customer satisfaction due to meeting delivery
schedules
Faster response to market changes
Improved labor and equipment utilization.
Better inventory planning and scheduling
Extensions of MRP
Extensions of MRP
Closed loop MRP
Capacity planning - load reports
MRP II - Manufacturing Resources Planning
Enterprise Resources Planning
Aggregate
Production
Planning
Material
Requirements
Planning
Master
Production
Scheduling
Resource
Availability
Realistic?
Yes
Shop
Floor
Schedules
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.
Time fences: Series of time intervals during which
order changes are allowed or restricted.
Capacity
Usually expressed as standard machine
hours or labor hours
Capacity = (no. machines or workers)
x (no. shifts) x (utilization)
x (efficiency)
Capacity Terms
Load reports
Department or work center reports that compare known
and expected future capacity requirements with projected
capacity availability.
Load profile
Compares released and planned orders with work center
capacity
Capacity
Productive capability; includes utilization and efficiency
Utilization
% of available working time spent working
Routing
file
Capacity
requirements
planning
Open
orders
file
Capacity Planning
Develop a tentative
master production
schedule
Use MRP to
simulate material
requirements
Convert material
requirements to
resource requirements
Revise tentative
master production
schedule
No
Is shop
capacity
adequate?
Yes
Firm up a portion
of the MPS
No
Can
capacity be
changed to meet
requirements
Yes
Change
capacity
Determining Loads
and Capacities
JOB
NO.
NO. OF
COPIES
SETUP
TIME (MIN)
RUN TIME
(MIN/UNIT)
TOTAL TIME
10
20
30
40
50
500
1,000
5,000
10,000
2,000
5.2
10.6
3.4
11.2
15.3
0.08
0.10
0.12
0.14
0.10
Hours of capacity
Normal
capacity
Time (weeks)
Hours of capacity
Pull ahead
Overtime
Work
an
extra
shift
Push back
Push back
Time (weeks)
Normal
capacity
MRP II
Manufacturing
Master
production schedule
Marketing
Production
plan
MRP
Rough-cut
capacity planning
Capacity req.
planning
Adjust
production plan
Yes
Problems?
No
Requirements
schedules
No
Problems?
Market
Demand
Finance
Yes
MRP II
Manufacturing Resource
Planning
(MRP II)
Customer
orders
Aggregate
production
plan
Forecast
No
Feasible?
Yes
Master production
schedule
Material requirements
planning
Capacity requirements
planning
No
Feasible?
Feedback
Yes
Purchase
orders
Work
orders
Inventory
Shop floor
control
Manufacture
Manufacturing
Resource Planning
(MRP II)
Aggregate
production
plan
Forecast
Customer
orders
Aggregate
production
plan
Forecast
No
Feasible?
Customer
orders
Yes
Master production
schedule
Material requirements
planning
No
Capacity requirements
planning
Feasible?
No
Feasible?
Feedback
Yes
Master
production
schedule
Yes
Purchase
orders
Work
orders
Inventory
Shop floor
control
Manufacture
Manufacturing
Resource Planning
(MRP II)
Master production
schedule
Customer
orders
Aggregate
production
plan
Forecast
No
Feasible?
Yes
Master production
schedule
Material requirements
planning
Material requirements
planning
Capacity requirements
planning
Capacity requirements
planning
No
Feasible?
Feedback
Yes
No
Feasible?
Yes
Purchase
orders
Work
orders
Inventory
Shop floor
control
Manufacture
Manufacturing
Resource Planning
(MRP
II)
Purchase
Work
orders
Customer
orders
Aggregate
production
plan
Forecast
No
Feasible?
Yes
Master production
schedule
orders
Material requirements
planning
Capacity requirements
planning
Shop floor
control
Inventory
No
Feasible?
Feedback
Yes
Purchase
orders
Work
orders
Inventory
Shop floor
control
Manufacture
Manufacture
Manufacturing
Resource Planning
(MRP II)
Customer
orders
Aggregate
production
plan
Forecast
No
Feasible?
Yes
Master production
schedule
Material requirements
planning
Capacity requirements
planning
No
Feasible?
Feedback
Yes
Purchase
orders
Work
orders
Inventory
Shop floor
control
Manufacture
ERP
MRP II with ties to customers and suppliers
(connects with supply-chain and customer
management applications)
ERP
ERP allows companies to:
1. Automate and integrate many of their business
processes
2. Share a common database and business
practices throughout the enterprise
3. Produce information in real time
ERP systems also include:
1. Supply Chain Management software and
2. Customer Relationship Management software
ERP Modules
Sales
&
Marketing
ERP Data
Repository
Human
Resources
Production &
Materials
Management