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Materials RequirementsPlanning

(MRP)

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OBJECTIVES

 Material Requirements Planning (MRP)

 MRP Logic and Product Structure Trees
 Time Fences
 MRP Example
 MRP II and Lot Sizing

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Material Requirements Planning

 Materials requirements planning

(MRP)adalahsuatualatuntukmenentukanjumlahpart,komponendanma
terial yangdibutuhkanuntukmelakukanprosesproduksi
 MRPmenunjukkaninformasijadualwaktusuatupartataukomponenmes
tidiorderataudiproduksi
 DependentdemandmenjadisumberinformasiuntukmembuatMRP
 MRP is a software system

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ContohlogikaMRPdan

StrukturPohonProduk
DiberikansuatustrukturpohonprodukuntukAdandiketahuiLead

Timesertainformasijumlahpermintaan(demand),buatlahsebuahperencaankebutuhanmaterial

yangmendefinisikanjumlahpartdankapandibutuhkan

Product Structure Tree for Assembly A

Lead Times

A 1 day
A B 2 days

C 1 day

D 3 days

E 4 days
B(4) C(2)
F 1 day

Total Unit Demand

Day 10 50 A
D(2) E(1) D(3) F(2)
Day 8 20 B (Spares)

Day 6 15 D (Spares)

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First, the number of units of “A” are scheduled backwards to allow for their lead

time. So, in the materials requirement plan below, we have to place an order for
th
50 units of “A” on the 9 day to receive them on day 10.

Day: 1 2 3 4 5 6 7 8 9 10
A Required 50
Order Placement 50

LT = 1 day

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Next,
Next,we
weneed
needtotostart
startscheduling
schedulingthe
thecomponents
componentsthat
thatmake
makeup
up“A”.
“A”. In
Inthe
thecase
caseofofcomponent
component“B”
“B”we
weneed
need44
B’s
B’sfor
foreach
eachA.
A. Since
Sincewe
weneed
need50
50A’s,
A’s,that
thatmeans
means200
200B’s.
B’s.And
Andagain,
again,we
weback
backthe
theschedule
scheduleup
upfor
forthe
the
necessary
necessary22days
daysofoflead
leadtime.
time.

Day: 1 2 3 4 5 6 7 8 9 10
A Required 50
Order Placement 50
B Required 20 200
Order Placement 20 200

LT = 2
Spares

A 4x50=200

B(4) C(2)

D(2) E(1) D(3) F(2)

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Finally,
Finally,repeating
repeatingthe
theprocess
processfor
forall
allcomponents,
components,we
wehave
havethe
thefinal
finalmaterials
materialsrequirements
requirementsplan:
plan:

Day: 1 2 3 4 5 6 7 8 9 10
A Required 50
LT=1 Order Placement 50
B Required 20 200
LT=2 Order Placement 20 200
C Required 100
LT=1 Order Placement 100
D Required 55 400 300
LT=3 Order Placement 55 400 300
E Required 20 200
LT=4 Order Placement 20 200
F Required 200
LT=1 Order Placement 200

Part D: Day 6

B(4) C(2) 40 + 15 spares

D(2) E(1) D(3) F(2)

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Master Production Schedule (MPS)

 Time-phased plan specifyinghow manyandwhenthe firm plans to

build eachend item

Aggregate
AggregatePlan
Plan
(Product
(ProductGroups)
Groups)

MPS

(Specific End Items)

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Types of Time Fences

 Frozen

– No schedule changes allowed within this window

 Moderately Firm

– Specific changes allowed within product groups as long as parts

are available
 Flexible

– Significant variation allowed as long as overall capacity

requirements remain at the same levels

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Exhibit 15.5
Exhibit 15.5
Example of Time Fences

Moderately
Frozen Flexible
Firm

Capacity
Forecast and available

capacity

Firm Customer Orders

8 15 26

Weeks

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Material Requirements Planning System

 Based on a master production schedule, a material requirements planning

system:

– Creates schedules identifying the specific parts and materials required to

produce end items

– Determines exact unit numbers needed

– Determines the dates when orders for those materials should be released,

based on lead times

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13

Aggregate Forecasts
Firm orders
product of demand
from known
plan from random
customers
customers

Master production
Engineering
Schedule (MPS) Inventory
design
transactions
changes

Material From Exhibit 15.6

From Exhibit 15.6

planning
Bill of (MRP Inventory

material computer record file

file program)

Secondary reports
Primary reports
Exception reports
Planned order schedule for inventory and
Planning reports
production control
Reports for performance control

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Bill of Materials (BOM) File

A Complete Product Description

 Materials

 Parts

 Components

 Production sequence

 Modular BOM
– Subassemblies

 Super BOM
– Fractional options

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Inventory Records File

 Each inventory item carried as a separate file

– Status according to “time buckets”

 Pegging

– Identify each parent item that created demand

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Primary MRP Reports

 Planned ordersto be released at a future time
 Order release noticesto execute the planned orders
 Changes in due datesof open orders due to rescheduling
 Cancellations or suspensionsof open orders due to cancellation or
suspension of orders on the master production schedule
 Inventory status data

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Secondary MRP Reports

 Planning reports, for example, forecasting inventory

requirements over a period of time
 Performance reportsused to determine agreement between
actual and programmed usage and costs
 Exception reportsused to point out serious discrepancies,
such as late or overdue orders

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Additional MRP Scheduling Terminology

 Gross Requirements

 Scheduled receipts

 Projected available balance

 Net requirements

 Planned order receipt

 Planned order release

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MRP Example

Item On-Hand Lead Time (Weeks)

X X 50 2
A 75 3
B 25 1
A(2) B(1) C 10 2
D 20 2

C(3) C(2) D(5)

Requirements include 95 units (80 firm orders and 15 forecast) of X in week 10

Requirements include 95 units (80 firm orders and 15 forecast) of X in week 10

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Day: 1 2 3 4 5 6 7 8 9 10
X Gross requirements 95
X LT=2 Scheduled receipts
Proj. avail. balance 50 50 50 50 50 50 50 50 50 50
On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A Gross requirements 90
A(2) LT=3 Scheduled receipts
Proj. avail. balance 75 75 75 75 75 75 75 75
On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
B Gross requirements 45
LT=1 Scheduled receipts
ItIttakes
takes22A’s
A’s Proj. avail. balance 25 25 25 25 25 25 25 25
for On- Net requirements 20
foreach
eachXX hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 10
On- Net requirements 35 40
hand Planned order receipt 35 40
10 Planner order release 35 40
D Gross requirements 100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 20
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80

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Day: 1 2 3 4 5 6 7 8 9 10
X Gross requirements 95
X LT=2 Scheduled receipts
Proj. avail. balance 50 50 50 50 50 50 50 50 50 50
On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A Gross requirements 90
A(2) B(1) LT=3 Scheduled receipts
Proj. avail. balance 75 75 75 75 75 75 75 75
On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
B Gross requirements 45
LT=1 Scheduled receipts
ItIttakes
takes11BBfor
for Proj. avail. balance 25 25 25 25 25 25 25 25
On- Net requirements 20
each
eachXX hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 10
On- Net requirements 35 40
hand Planned order receipt 35 40
10 Planner order release 35 40
D Gross requirements 100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 20
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80

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Day: 1 2 3 4 5 6 7 8 9 10
X Gross requirements 95
X LT=2 Scheduled receipts
Proj. avail. balance 50 50 50 50 50 50 50 50 50 50
On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A Gross requirements 90
A(2) B(1) LT=3 Scheduled receipts
Proj. avail. balance 75 75 75 75 75 75 75 75
On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
C(3) B Gross requirements 45
LT=1 Scheduled receipts
Proj. avail. balance 25 25 25 25 25 25 25 25
On- Net requirements 20
hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
ItIttakes
takes33C’s
C’sfor
for LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 10
each
eachAA On- Net requirements 35 40
hand Planned order receipt 35 40
10 Planner order release 35 40
D Gross requirements 100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 20
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80

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Day: 1 2 3 4 5 6 7 8 9 10
X Gross requirements 95
X LT=2 Scheduled receipts
Proj. avail. balance 50 50 50 50 50 50 50 50 50 50
On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A Gross requirements 90
A(2) B(1) LT=3 Scheduled receipts
Proj. avail. balance 75 75 75 75 75 75 75 75
On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
C(3) C(2) B Gross requirements 45
LT=1 Scheduled receipts
Proj. avail. balance 25 25 25 25 25 25 25 25
On- Net requirements 20
hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
ItIttakes
takes22C’s
C’sfor
for LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 10
each
eachBB On- Net requirements 35 40
hand Planned order receipt 35 40
10 Planner order release 35 40
D Gross requirements 100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 20
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80

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Day: 1 2 3 4 5 6 7 8 9 10
X Gross requirements 95
X LT=2 Scheduled receipts
Proj. avail. balance 50 50 50 50 50 50 50 50 50 50
On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A Gross requirements 90
A(2) B(1) LT=3 Scheduled receipts
Proj. avail. balance 75 75 75 75 75 75 75 75
On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
C(3) C(2) D(5) B Gross requirements 45
LT=1 Scheduled receipts
Proj. avail. balance 25 25 25 25 25 25 25 25
On- Net requirements 20
hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
ItIttakes
takes55D’s
D’sfor
for LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 10
each
eachBB On- Net requirements 35 40
hand Planned order receipt 35 40
10 Planner order release 35 40
D Gross requirements 100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 20
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80

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Closed Loop MRP

Production Planning

Master Production Scheduling

Material Requirements Planning

Capacity Requirements Planning

No
Realistic?
Feedback
Feedback

Yes

Execute:

Capacity Plans

Material Plans

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Manufacturing Resource Planning

(MRP II)

 Goal: Plan and monitor all resources of a manufacturing firm

(closed loop):
– manufacturing

– marketing

– finance

– engineering

 Simulate the manufacturing system

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Lot Sizing in MRP Programs

 Lot-for-lot (L4L)

 Economic order quantity (EOQ)

 Least total cost (LTC)

 Least unit cost (LUC)

 Which one to use?

– The one that is least costly!

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End of Chapter 16

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