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Example: MRP Schedule

Example: MRP Schedule. LocoMopeds is a manufacturer of off-road mopeds. The following product structure diagram represents the bill of materials for its dual-carburetor Model 442 moped. MOPED. Level 0. ENGINE ASSEMBLY. GAS TANK. WHEEL ASSEMBLY (2). FRAME. Level 1. MOTOR.

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Example: MRP Schedule

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  1. Example: MRP Schedule LocoMopeds is a manufacturer of off-road mopeds. The following product structure diagram represents the bill of materials for its dual-carburetor Model 442 moped. MOPED Level 0 ENGINE ASSEMBLY GAS TANK WHEEL ASSEMBLY (2) FRAME Level 1 MOTOR CARBURETOR (2) HUB ASSEMBLY TIRE Level 2

  2. Example: MRP Schedule • Bill of Material Parent Component Level Compon. Code Code Code Description Req’d 442 0 #442 Moped 442 EA 1 Engine Assem. 1 GT 1 Gas Tank 1 WA 1 Wheel Assem. 2 F 1 Frame 1 EA M 2 Motor 1 C 2 Carburetor 2 WA HA 2 Hub Assem. 1 T 2 Tire 1

  3. Example: MRP Schedule • Inventory Status Report

  4. WEEK 10 11 12 13 14 15 16 QUANTITY 0 1000 0 1300 800 1200 1400 Example: MRP Schedule The company is currently planning production for weeks 10 through 16. Based on existing orders and demand forecasts, the master production schedule is as follows: Master Production Schedule: #442 Moped Determine the MRP schedule required to support the master production schedule for the Model 442 moped in weeks 10-16.

  5. Example: MRP Schedule • MRP Schedule for #442 Mopeds for Weeks 10 - 16, considering that: • Gross Requirements come from the moped MPS • There is an On-Hand balance of 500 mopeds at the end of week 9 • There are no Scheduled Receipts for mopeds • A lot-for-lot rule is used for ordering mopeds • Safety stock of 200 mopeds is desired • Lead time for mopeds is one week

  6. ITEM: 442 MOPED LT: 1 LOT SIZE: LFL SS: 200 WEEK 10 11 12 13 14 15 16 1000 800 GROSS REQUIREMENTS 0 0 1400 1300 1200 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 500) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for #442 Mopeds . . . Initially

  7. ITEM: 442 MOPED LT: 1 LOT SIZE: LFL SS: 200 WEEK 10 11 12 13 14 15 16 1300 800 GROSS REQUIREMENTS 0 0 1400 1300 1200 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 500) 300 300 0 0 0 0 0 NET REQUIREMENTS 1000 1300 800 1200 1400 PLANNED ORDER RECEIPTS 1000 1300 800 1200 1400 PLANNED ORDER RELEASES 1000 1300 800 1200 1400 Example: MRP Schedule • MRP Schedule for #442 Mopeds . . . Completed

  8. Example: MRP Schedule • MRP Schedule for Gas Tanks for Weeks 10 - 16, considering that: • Gross Requirements come from moped Planned-Order-Releases • There is an On-Hand balance of 600 gas tanks at the end of week 9 • There is a Scheduled Receipt for 900 tanks in week 10 • A lot-for-lot rule is used for ordering gas tanks • Safety stock of 200 gas tanks is desired • Lead time for gas tanks is two weeks

  9. ITEM: GAS TANK LT: 2 LOT SIZE: LFL SS: 200 WEEK 10 11 12 13 14 15 16 0 1200 GROSS REQUIREMENTS 1000 1300 0 800 1400 SCHEDULED RECEIPTS 900 AVAILABLE (ON-HAND = 600) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Gas Tanks . . . Initially

  10. ITEM: GAS TANK LT: 2 LOT SIZE: LFL SS: 200 WEEK 10 11 12 13 14 15 16 GROSS REQUIREMENTS 1000 0 1300 800 1200 1400 0 SCHEDULED RECEIPTS 900 AVAILABLE (ON-HAND = 600) 1300 300 300 0 0 0 0 NET REQUIREMENTS 1000 800 1200 1400 PLANNED ORDER RECEIPTS 1000 800 1200 1400 PLANNED ORDER RELEASES 1000 800 1200 1400 Example: MRP Schedule • MRP Schedule for Gas Tanks . . . Completed

  11. Example: MRP Schedule • MRP Schedule for Frames for Weeks 10 - 16, considering that: • Gross Requirements come from moped Planned-Order-Releases • There is an On-Hand balance of 600 frames at the end of week 9 • There is a Scheduled Receipt for 2000 frames in week 10 • The firm uses a Lot Size (multiple) of 2000 for ordering frames • No safety stock of frames is desired • Lead time for frames is 3 weeks

  12. ITEM: FRAME LT: 3 LOT SIZE: 2000 SS: 0 WEEK 10 11 12 13 14 15 16 GROSS REQUIREMENTS 1000 0 1300 800 1200 1400 0 SCHEDULED RECEIPTS 2000 AVAILABLE 600 NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Frames . . . Initially

  13. ITEM: FRAME LT: 3 LOT SIZE: 2000 SS: 0 WEEK 10 11 12 13 14 15 16 GROSS REQUIREMENTS 1000 0 1300 800 1200 1400 0 SCHEDULED RECEIPTS 2000 AVAILABLE (ON-HAND = 600) 1600 1600 1600 300 1500 300 900 NET REQUIREMENTS 0 0 0 500 0 1100 0 PLANNED ORDER RECEIPTS 2000 2000 PLANNED ORDER RELEASES 2000 2000 Example: MRP Schedule • MRP Schedule for Frames . . . Completed

  14. Example: MRP Schedule • MRP Schedule for Engine Assemblies for Weeks 10 - 16, considering that: • Gross Requirements come from moped Planned-Order-Releases • There is an On-Hand balance of 300 engine assemblies at the end of week 9 • There is a Scheduled Receipt for 1000 engine assemblies in week 10 • The firm uses a Lot Size (multiple) of 500 for ordering engine assemblies • Safety Stock of 100 engine assemblies is desired • Lead time for engine assemblies is 1 week

  15. ITEM: ENGINE ASSEM. LT: 1 LOT SIZE: 500 SS: 100 WEEK 10 11 12 13 14 15 16 0 1200 GROSS REQUIREMENTS 1000 1300 0 800 1400 SCHEDULED RECEIPTS 1000 AVAILABLE (ON-HAND = 300) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Engine Assemblies . . . Initially

  16. ITEM: ENGINE ASSEM. LT: 1 LOT SIZE: 500 SS: 100 WEEK 10 11 12 13 14 15 16 0 1200 GROSS REQUIREMENTS 1000 1300 0 800 1400 SCHEDULED RECEIPTS 1000 AVAILABLE (ON-HAND = 300) 200 200 200 400 100 400 0 NET REQUIREMENTS 1100 400 1100 1000 PLANNED ORDER RECEIPTS 1500 500 1500 1000 PLANNED ORDER RELEASES 1500 500 1500 1000 Example: MRP Schedule • MRP Schedule for Engine Assemblies . . . Completed

  17. Example: MRP Schedule • MRP Schedule for Motors for Weeks 10 - 16, considering that: • Gross Requirements come from engine assembly Planned-Order-Releases • There is an On-Hand balance of 250 motors at the end of week 9 • There are no Scheduled Receipts for motors • A lot-for-lot rule is used for ordering motors • No Safety Stock of motors is desired • Lead time for motors is 1 week

  18. ITEM: MOTOR LT: 1 LOT SIZE: LFL SS: 0 WEEK 10 11 12 13 14 15 16 1500 1000 1500 GROSS REQUIREMENTS 500 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 250) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Motors . . . Initially

  19. ITEM: MOTOR LT: 1 LOT SIZE: LFL SS: 0 WEEK 10 11 12 13 14 15 16 1500 1000 1500 GROSS REQUIREMENTS 500 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 250) 250 250 0 0 0 0 0 NET REQUIREMENTS 1250 500 1500 1000 PLANNED ORDER RECEIPTS 1250 500 1500 1000 PLANNED ORDER RELEASES 1250 500 1500 1000 Example: MRP Schedule • MRP Schedule for Motors . . . Completed

  20. Example: MRP Schedule • MRP Schedule for Carburetors for Weeks 10 - 16, considering that: • Gross Requirements come from engine assembly Planned-Order-Releases (times 2) • There is an On-Hand balance of 150 carburetors at the end of week 9 • There are no Scheduled Receipts for carburetors • A Lot Size of 200+ is used for ordering carburetors • Safety Stock of 100 carburetors is desired • Lead time for carburetors is 2 weeks

  21. ITEM: CARBURETOR LT: 2 LOT SIZE: 2000+ SS: 100 WEEK 10 11 12 13 14 15 16 3000 2000 3000 GROSS REQUIREMENTS 1000 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 150) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Carburetors . . . Initially

  22. ITEM: CARBURETOR LT: 2 LOT SIZE: 2500+ SS: 100 WEEK 10 11 12 13 14 15 16 3000 2000 3000 GROSS REQUIREMENTS 1000 3000 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 150) 50 3050 50 1550 1050 1550 1550 NET REQUIREMENTS 950 1450 950 PLANNED ORDER RECEIPTS 2500 2500 2500 PLANNED ORDER RELEASES 2500 2500 2500 Example: MRP Schedule • MRP Schedule for Carburetors . . . Completed

  23. Example: MRP Schedule • MRP Schedule for Wheel Assemblies for Weeks 10 - 16, considering that: • Gross Requirements come from moped Planned-Order-Releases (times 2) • There is an On-Hand balance of 500 wheel assemblies at the end of week 9 • There is a Scheduled Receipt for 2000 wheel assemblies in week 10 • A Lot Size (multiple) of 500 is used for ordering wheel assemblies • Safety Stock of 400 wheel assemblies is desired • Lead time for wheel assemblies is 1 week

  24. ITEM: WHEEL ASSEM. LT: 1 LOT SIZE: 500 SS: 400 WEEK 10 11 12 13 14 15 16 0 2400 GROSS REQUIREMENTS 2000 2600 0 1600 2800 SCHEDULED RECEIPTS 2000 AVAILABLE (ON-HAND = 500) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Wheel Assemblies . . . Initially

  25. ITEM: WHEEL ASSEM. LT: 1 LOT SIZE: 500 SS: 400 WEEK 10 11 12 13 14 15 16 0 2400 GROSS REQUIREMENTS 2000 2600 0 1600 2800 SCHEDULED RECEIPTS 2000 AVAILABLE (ON-HAND = 500) 2100 100 100 0 400 0 200 NET REQUIREMENTS 2500 1600 2000 2800 PLANNED ORDER RECEIPTS 2500 2000 2000 3000 PLANNED ORDER RELEASES 2500 2000 2000 3000 Example: MRP Schedule • MRP Schedule for Wheel Assemblies . . . Completed

  26. Example: MRP Schedule • MRP Schedule for Hub Assemblies for Weeks 10 - 16, considering that: • Gross Requirements come from wheel assembly Planned-Order-Releases • There is an On-Hand balance of 100 hub assemblies at the end of week 9 • There is a Scheduled Receipt of 2400 hub assemblies in week 11 • A lot-for-lot rule is used for ordering hub assemblies • No Safety Stock of hub assemblies is desired • Lead time for hub assemblies is 1 week

  27. ITEM: HUB ASSEM. LT: 1 LOT SIZE: LFL SS: 0 WEEK 10 11 12 13 14 15 16 2500 3000 GROSS REQUIREMENTS 0 2000 0 2000 0 2400 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 100) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Hub Assemblies . . . Initially

  28. ITEM: HUB ASSEM. LT: 1 LOT SIZE: LFL SS: 0 WEEK 10 11 12 13 14 15 16 2500 3000 GROSS REQUIREMENTS 0 2000 0 2000 0 2400 SCHEDULED RECEIPTS AVAILABLE (ON-HAND = 100) 100 2500 0 0 0 0 0 NET REQUIREMENTS 2000 2000 3000 PLANNED ORDER RECEIPTS 2000 2000 3000 PLANNED ORDER RELEASES 2000 2000 3000 Example: MRP Schedule • MRP Schedule for Hub Assemblies . . . Completed

  29. Example: MRP Schedule • MRP Schedule for Tires for Weeks 10 - 16, considering that: • Gross Requirements come from wheel assembly Planned-Order-Releases • There is an On-Hand balance of 500 tires at the end of week 9 • There are Scheduled Receipts for 3000 and 2000 tires weeks 11 and 12, respectively • A Lot Size (multiple) of 1000 is used for ordering tires • Safety Stock of 500 tires is desired • Lead time for tires is 3 weeks

  30. ITEM: TIRE LT: 3 LOT SIZE: 1000 SS: 500 WEEK 10 11 12 13 14 15 16 2500 3000 GROSS REQUIREMENTS 0 2000 0 2000 0 3000 SCHEDULED RECEIPTS 2000 AVAILABLE (ON-HAND = 500) NET REQUIREMENTS PLANNED ORDER RECEIPTS PLANNED ORDER RELEASES Example: MRP Schedule • MRP Schedule for Tires . . . Initially

  31. ITEM: TIRE LT: 3 LOT SIZE: 1000 SS: 500 WEEK 10 11 12 13 14 15 16 2500 3000 GROSS REQUIREMENTS 0 2000 0 2000 0 3000 SCHEDULED RECEIPTS 2000 AVAILABLE (ON-HAND = 500) 0 3000 2500 500 500 500 500 NET REQUIREMENTS 1500 2500 PLANNED ORDER RECEIPTS 2000 3000 PLANNED ORDER RELEASES 2000 3000 Example: MRP Schedule • MRP Schedule for Tires . . . Completed

  32. Issues in MRP • Management Commitment • User involvement • Education and training • Selection of S/W packages • Data accuracy • Realistic MPS • Realistic lead times • Maintaining accurate BOM files

  33. 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

  34. Lot-Sizing Methods in MRP • Economic Order Quantity (EOQ) • does not consider quantity discounts • does not always provide the most economical approach with lumpy demands • Lot-for-Lot (LFL) • accommodates lumpy demand • Period Order Quantity (POQ) • Many others

  35. Lot-Sizing Methods in MRP The best lot-sizing method, resulting in least cost, depends on cost and demand patterns

  36. 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

  37. Lot-Sizing Methods • Economic Order Quantity (EOQ) • does not consider quantity discounts • does not always provide the most economical approach with lumpy demand • Lot-for-Lot (LFL) • accommodates lumpy demand • Period Order Quantity (POQ) The best method, resulting in least cost, depends on cost and demand patterns.

  38. Evaluation of MRP • Most beneficial to process-focused systems that have long processing times and complex multistage production steps • Lead times must be reliable • Must freeze MPS for some time before actual production... certain demand • Difficult to implement

  39. Closed Loop MRP Production Planning Master Production Scheduling Material Requirements Planning Capacity Requirements Planning No Feedback Realistic? Feedback Yes Execute: Capacity Plans Material Plans

  40. Closed Loop MRP Materials Management at Washburn Guitar, Inc.

  41. Manufacturing Resource Planning (MRP II) • Goal: Plan and monitor all resources of a manufacturing firm (closed loop): • Manufacturing • Marketing • Finance • Engineering • Shop-floor control • Simulation capability of the manufacturing system

  42. Enterprise Resource Planning (ERP) • ERP systems available today integrate manufacturing with other functional areas in an organization • ERP systems make it easier for management to obtain local information about performance of specific processes, bottlenecks resources, and products (or product groups), etc. • Class I ERP software packages (for large companies) include BAAN, SAP, and Oracle

  43. MRP II System MRP II System

  44. 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

  45. Capacity Requirements Planning (CRP)

  46. Capacity Requirements Planning (CRP) • Tests MPS for feasibility • Utilizes routings to determine labor/machine loads • If schedule feasible, recommends freezing • If schedule overloads resources, points out processes that are overscheduled

  47. Load Schedules • Compares actual labor and machine hours against available hours • Offsets schedules between successive stages of production by lead times • Provides feasible MPS and economically loaded work centers • Promotes system operating efficiency ... lowers costs!

  48. World-Class Practice • Lead times respond to conditions • Product development as levels of product structure tree • Lead times that adjust to load • MRP reports shared with customers and suppliers

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