Capacity Requirements Planning

System (CRP)

PREPARED BY:

• MOHAMAD AMIRUL ASYRAF BIN AHMAD RIDHA

• MUHAMAD FAZLAN BIN MAZLAN
DEFINITION

• The process of determining the amount of

capacity required to produce in the future
• A computerized system that projects the load
from a given Material Requirements Plan
(MRP) onto the capacity of a system and
identifies underloads and overloads
DEFINITION
• A tool for:
– determining capacity that is available and required.
– Alleviating bottleneck work centers
• Helping planners make the right decisions on scheduling
before problems develop
• Verifies that you have sufficient capacity available to meet
the capacity requirements for MRP plans
REASON TO USE CRP
• If a construction company can start new
projects in the future
• If production plant can produce a spontaneous
order
• If there is enough labor to make up for
increased seasonal sales
REASON TO USE CRP
• Bottleneck Management :
- The throughput of all products processed is controlled by
bottlenecks
– Work centers need to be scheduled at a rate to prevent
bottlenecks
– To eliminate bottlenecks, a time buffer inventory should be
established.
INFORMATION ENTERED INTO CRP (INPUT)
• Planned Order Releases
• Equipment and labor routing file
• Open orders file
PLAN ORDER RELEASES

• Information from the Material Requirements

Planning which tells when you should start the
order so it can be completed on time
EQUIPMENT AND LABOR ROUTING FILE

• Information that details the requirements of

equipment and labor to complete the order as
needed in the required time frame
OPEN ORDERS FILE

• Information regarding the orders that are

currently started and need to be completed
INFORMATION PROVIDED BY CRP (OUTPUT)
• Load profile for each operation in the
production system
WHAT IS CAPACITY?
• The work that the system is capable of doing in a period of time
• It must be determined at different levels:
– plant
– department
– work center
• It is normally stated in standard hours of work
WHAT IS CAPACITY?
• Capacity = (no. of machines or workers) x (no.
shifts) x (utilization) x (efficiency)
• Best operating level is the percent of capacity
utilization that minimizes average unit cost
– Usually 80% with a 20% cushion
UTILIZATION AND EFFICIENCY
• Utilization is the percent of available time
spent working
• Efficiency is how well a machine or worker
performs compared to a standard output level
UTILIZATION AND CAPACITY

• Utilization=Actual Charged/ Schedule Available Hours

• Efficiency= Standard Hours Earned/ Actual Hours Charged