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Supply Chain Management

Supply Chain Management. Materials Requirements Planning (MRP). Supply Chain Management. Material Requirement Planning (MRP) MRP determines the number of components and raw material required and their build dates to complete a given number of finished goods by a specific date.

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Supply Chain Management

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  1. Supply Chain Management Materials Requirements Planning (MRP)

  2. Supply Chain Management Material Requirement Planning (MRP) • MRP determines the number of components and raw material required and their build dates to complete a given number of finished goods by a specific date.

  3. Supply Chain Management Resource Requirements Planning Aggregate Planning Master Production Scheduling (MPS) Resource Requirements Planning Material Requirements Planning (MRP) Capacity Requirements Planning (CRP)

  4. Firm orders from known customers Forecast of demand from random customers Aggregate Product Plan Inventory transactions Master Production Schedule (MPS) Engineering design changes Bill of Materials (BOM) file Inventory records file Material RequirementsPlanning (MRP) Reports Supply Chain Management Production Planning Hierarchy

  5. Supply Chain Management Materials Requirements Planning (MRP) • Computer based system • Explodes Master Schedule (MPS) into required amounts of raw materials and subassemblies to support MPS

  6. Supply Chain Management Material Requirements Planning • How much of an item is needed? • When is an item needed to complete • a specified number of units... • in a specified period of time? • Dependent demand drives MRP

  7. Supply Chain Management Objectives of MRP • Improve customer service • Reduce inventory investment • Improve plant operating efficiency

  8. Supply Chain Management Lot-Sizing in MRP • Lot-size is the quantity ordered/produced at one time • Large lots are preferred because: • Changeovers cost less and capacity greater • Annual cost of purchase orders less • Price breaks and transportation breaks can be utilized • Small lots are preferred because: • Lower inventory carrying cost • Reduced risk of obsolescence • Shorter cycle time to produce customer order

  9. Supply Chain Management Bill Of Material (BOM) • A list of components and raw material and their respective quantities required to produce specific end items.

  10. Supply Chain Management Manufacturing Resource Planning (MRP II) • Advanced MRP system that takes into consideration the equipment capacities and other resources that are associated with a manufacturing facility. Fundamental manufacturing equation of MRP II is What are we going to make? What does it take to make it? What do we have? What do we have to get?

  11. MRP I to MRP II • MRP I simply exploded demand (MPS) into required materials • MRP II became Manufacturing Resource Planning which provides a closed-loop business management system • Financial management • Shop floor control • Operations management • Simulation capability

  12. Supply Chain Management End of Topic

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