MRP 1

Example
 Example 1
• Suppose you are manufacturing scissors
• The parts are :
• Two sides of the scissors
• And the centre screws
BOM
 BOM
• Suppose you need two screws
• The BOM will be
 MPS
• Suppose the MPS shows
• The production required is 400 3rd week
• 600 4th week, 800 6th week and
• 300 7th week
• GR will be as follows
 Inventory records
• Suppose the week 1 stock is 550 scissors
• And the safety stock is 50
• Net requirement(NR) will then be
• (SS-safety stock and A is availability)
 Inventory records
• Remember
1. If the availability is more than 0 , NR = GR-A+ SS
2. If the availability is equal to 0 , NR = GR
 Lead times
• For incorporating lead times we need to
prepone the requirement by the time it takes
to manufacture
• This is called emission of planned orders (EPO)
• Suppose the lead time in our case is 2 weeks
EPO
 Explosion of MRP
• Explosion refers to breaking the EPO down to
the BOM level
• In this case BOM is
Explosion of MRP
 Explosion of MRP according to BOM
• Suppose that our stock has 700 units of L , 500
units of R, and 300 units of S
• And Security Stock of S is 125 units
• We calculate the Net Requirements of each L,
R and S by applying the two rules mentioned
before:
1.If the availability is more than 0 , NR = GR-A+ SS
2.If the availability is equal to 0 , NR = GR
 Net Requirements according to the bill of material

• The last step is the explosion of the MRP

• By applying the Lead times of each to
calculate their EPO
• Suppose the following are the Lead Times:
• R – 1 week
• L – 2 weeks
• S – 1 week
 assignment
• The production manager at Aldershot Manufacturing
wishes to develop a materials requirements plan for
producing chairs over an 8 week period. She estimates
that the lead time between releasing an order to the
shop floor and producing a finished chair is 2 weeks.
The company currently has 260 chairs in stock and no
safety stock (safety stock is stock held in reserve to
meet customer demand if necessary). The forecast
customer demand is for 150 chairs in week 1, 70 in
week 3, 175 in week 5, 90 in week 7 and 60 in week 8.
BOM
 Inventory
• Item On-hand inventory (units) Lead time

• chair 260
• seat 60 2W
• back 40
2W
• legs 80
1W