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Material Requirements Planning (MRP)

Material Requirements Planning (MRP). Summary of Scheduling Process. FORECAST  ROUGH-CUT CAPACITY PLANNING  PRODUCTION PLAN  MASTER PRODUCTION SCHEDULE (MPS)  MATERIAL REQUIREMENTS PLANNING (MRP)  CAPACITY REQUIREMENTS PLANNING  

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Material Requirements Planning (MRP)

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  1. Material Requirements Planning (MRP)

  2. Summary of Scheduling Process FORECAST  ROUGH-CUT CAPACITY PLANNING  PRODUCTION PLAN  MASTER PRODUCTION SCHEDULE (MPS)  MATERIAL REQUIREMENTS PLANNING (MRP)  CAPACITY REQUIREMENTS PLANNING  SHOP FLOOR CONTROLS VENDOR CONTROLS

  3. MRP • Material Requirements Planning (MRP) – Translates MPS into Schedule of Component Requirements, Order Quantities, and Times • Manufacturing Resource Planning (MRP II) – Computes Resource Requirements, i. e. Labor • Enterprise Resource Planning (ERP) – Has Financial, Marketing, Etc. Components

  4. Nature of Demand • Independent Demand – Demand Outside of Firm, on MPS (Vanilla Ice Cream) • Dependent Demand – Derived Demand within Firm (Cream, Vanilla Flavoring, Etc.)

  5. MRP Inputs Master Production Schedule (MPS) Bill of Materials (Parts List) Inventory Status – On Hand Lead Times

  6. MRP Outputs (Objectives) • Determine Requirements • What to Order • How Much to Order • When to Order • When to Schedule Delivery • Keep Priorities Current

  7. MRP Example 1 The Protecto Corporation sells special survival kits to the visitors of Congress and the state legislatures. In April there are requirements for 1000 kits. Each kit contains: two ear plugs one bottle of extra strength aspirin five paper gas masks one box one label The firm only manufactures the ear plugs and the gas masks. The other parts are purchased. Each ear plug uses two ounces of wax and .08 hours of labor time. Each gas mask uses a sheet of cardboard, one-half ounce of wax, and .10 hours of labor.

  8. Bill of Materials: Example 1

  9. Component Parts & Labor Requirements Ear Plugs (2 x 1000) = 2000 Aspirin (1 x 1000) = 1000 Gas Masks (5 x 1000) = 5000 Boxes (1 x 1000) = 1000 Labels (1 x 1000) = 1000 Cardboard (1 x 5000) = 5000 Wax (2 x 2000) + (.5 x 5000) = 6500 Labor Hours (.08 x 2000) + (.1 x 5000) = 660

  10. Cardboard Sheets if 3% Scrapped Adjustment for Scrap: Scheduled Units = MRP / (1 – Scrap %) Scheduled Units = 5000 / .97 = 5155

  11. Standard and Actual Labor Time – 20 Worker Idle Time Standard Time = MRP / (1 - % Delay) ST = 0.66 / 0.8 = 0.825 Hours Actual Time = ST / Labor Efficiency AT = 0.825 /.9 = 0.920 Hours

  12. MRP Example 2 In order to make one starship, you need 3 warp engines and 4 impulse engines. Each warp engine requires 10 dilithium crystals, 7 units of platinum, and 3 antimatter pods. Each impulse engine requires 2 antimatter pods and 4 units of platinum. The lead times are: ItemLead Time Starship (SS) 2 years Warp Engine (WE) 3 years Impulse Engine (IE) 1 year Dilithium Crystal (DC) 2 years Antimatter Pods (AM) 1 year Platinum (PL) 2 years The Federation has ordered 3 starships to be delivered in AD 2379.

  13. Bill of Materials: Example 2

  14. MRP Calculations Starship: Lead Time 2 Years Warp Engine: Lead Time 3 Years

  15. MRP Calculations Starship: Lead Time 2 Years Impulse Engine: Lead Time 1 Year

  16. MRP Calculations Warp Engine: Lead Time 3 Years Dilithium Crystal: Lead Time 2 Years

  17. MRP Calculations: • Work from Top to Bottom of Product Structure Tree (Low-Level Code Order) • Subtract Out Any Items On Hand • Combine Common Components – Put on the Same Table. If on the Same Square, Add.

  18. MRP Extensions: • Multiple Bills of Material • On Hand Quantities • On Order Quantities • Spare Parts

  19. MRP Example 3 A firm makes two products, A and R. A computer file reveals the following information about A and R, and their component parts: ItemOn HandLead TimeMPSLot SizeOn Order A 10 3 Weeks 160 (week 8) 1 B 0 2 Weeks 400 C 0 1 Week 400 (week 5) 1 D 200 3 Weeks 500 E 0 1 Week 1 200 (week 2) R 20 3 Weeks 145 (week 7) 1

  20. Bill of Materials: Example 3

  21. Bill of Materials: Example 3

  22. MRP Calculations A: Lead Time 3 Weeks, Low-Level Code 0 D: Lead Time 3 Weeks, Low-Level Code 1

  23. MRP Calculations R: Lead Time 3 Weeks, Low-Level Code 0 B: Lead Time 2 Weeks, Low-Level Code 1

  24. Low Level Codes • Item E is What Low-Level Code? • Item C is What Low-Level Code? • Can You Do the MRP Tables for Items C and E?

  25. Material Planners • People Who Manage MRP System • Release Manufacturing Orders (MO) or Purchasing Orders (PO) • Reschedule Due Dates of Open Orders as Needed • Reconcile Orders and Find Cause • Solve Shortages by Expediting • Coordinate with Others

  26. Material PlannerWorks with: • Planned Orders • Released Orders • Firm Planned Orders • Exception Messages • Transaction Messages

  27. Material Planner UsesFeedback for Priorities • Suppliers Actions Through Purchasing • Early or Late Completions or Differing Quantities • Management Actions (Changing MPS)

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