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Demand. BOM. Material Data. M aterial R equirements P lanning. Inputs. Output. Planned Orders. Inputs. Demand. Output. Planned Orders. BOM. Material Data. M aterial R equirements P lanning. With MRP, production is planned to meet: Future demand forecasts (make-to-stock)
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Demand BOM MaterialData Material Requirements Planning Inputs Output Planned Orders
Inputs Demand Output Planned Orders BOM MaterialData Material Requirements Planning • With MRP, production is planned to meet: • Future demand forecasts (make-to-stock) • Orders to be completed in the future (make-to-order or assemble-to-order) • A key input is, therefore, actual demand or a demand forecast MRP is a Push production system
Inputs Demand Output Planned Orders BOM MaterialData Material Requirements Planning • Planning • Sales and Operations Planning (SOP) • Forecasting, marketing plans, capacity • Profitability Analysis • Controlling (CO) Module (CO-PA) • Direct Input (Demand Management) Demand Sources
Demand Management • Simplest way to create demand it to input it directly:
Inputs Demand Output Planned Orders BOM MaterialData Material Requirements Planning • MRP uses the assembly structure, or Bill of Material (BOM) to determine how many components or subassemblies are needed to make the required number of finished products • Considers available inventory of components and subassemblies in calculations—net requirements MRP is designed for assembled products
Inputs Demand Output Planned Orders BOM MaterialData Material Requirements Planning • For end-items, demand is “independent”—from customers • For other components, demand can be determined using the BOM • Dependent demand MRP is designed for assembled products
Inputs Demand Output Planned Orders BOM MaterialData Material Requirements Planning ## NRG–A (7 cases) ## Dough NRG–A (500 lb) ## Oats (300 lb) ## Wheat Germ (50 lb) ## Raisins (50 lb) ## Carob Chips (50 lb)
Inputs Demand Output Planned Orders BOM MaterialData Material Requirements Planning Key MRP concept: Time-phased BOM ## NRG–A (7 cases) ## Dough NRG–A (500 lb) ## Oats (300 lb) ## Wheat Germ (50 lb) ## Raisins (50 lb) ## Carob Chips (50 lb) Time
## NRG–A (7 cases) ## Dough NRG–A (500 lb) Bill of Material (BOM)
## NRG–A (7 cases) ## Dough NRG–A (500 lb) Bill of Material (BOM)
## Dough NRG–A (500 lb) ## Oats (300 lb) ## Wheat Germ (50 lb) ## Cinnamon (5 lb) ## Nutmeg (2 lb) Bill of Material (BOM)
## Dough NRG–A (500 lb) ## Oats (300 lb) ## Wheat Germ (50 lb) ## Cinnamon (5 lb) ## Nutmeg (2 lb) Bill of Material (BOM)
Inputs Demand Output Planned Orders BOM MaterialData Material Requirements Planning Material Data determines production lot size and timing • Primary material data includes: • Current Inventory • Lot sizing procedure • Production lead times • All of this data is available in SAP via the Stock/Requirements List
Material Data—S/R List Inventory Level 0 Inventory Detail
Material Data—S/R List Lot Size FX, 7
Material Data—S/R List LeadTime 1
Part: A LS: 50 LT: 2 1 2 3 4 5 6 7 8 9 10 Gross Requirements 10 10 15 15 15 20 20 15 10 10 Scheduled Receipts 50 Planned Order Receipts 50 50 Available Balance 15 5 45 30 15 0 30 10 45 35 25 Planne d Order Releases 50 50 Textbook MRP Textbook MRP uses a bucketed system
Textbook MRP LS - lot size - size of production batch or lot sizing method Gross Requirements - quantity needed in each period - from MPS or from other components and assemblies Scheduled Receipts - Planned receipt dates for orders that have already been placed Planned Order Receipts - expected receipt date for planned orders (orders that haven't been placed yet) Available Balance - Projected inventory balance at the end of each period Planned Order Releases - Orders that need to be placed (as determined by MRP process) to meet gross requirements (source of planned order receipts)
Inventory Data Initial Scheduled Component LS LT Inventory Receipts A LFL 1 - 10 in pd. 1 B 50 2 30 50 in pd. 2 C 50 3 40 50 in pd. 3 30 in pd. 3 D 30 4 30 Textbook MRP—Example Problem