MRP%20and%20ERP

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Chapter 15

• MRP and ERP

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MRP

• Material requirements planning (MRP)
  Computer-based information system for ordering
  and scheduling of dependent demand inventories

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Dependant Demand

• Dependent demand Demand for items that are
  subassemblies or component parts to be used in
  production of finished goods.

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Dependent vs Independent Demand
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MPR Inputs

• Master Production Schedule
• Time-phased plan specifying timing and quantity
  of production for each end item.
• Material Requirement Planning Process

Product Structure Tree
Lead Times
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Master Schedule

• Master schedule One of three primary inputs in
  MRP states which end items are to be produced,
  when these are needed, and in what quantities.
• Cumulative lead time The sum of the lead times
  that sequential phases of a process require, from
  ordering of parts or raw materials to completion
  of final assembly.

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Planning Horizon
Figure 14-4
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Bill-of-Materials

• Bill of materials One of the three primary
  inputs of MRP a listing of all of the raw
  materials, parts, subassemblies, and assemblies
  needed to produce one unit of a product.
• Product structure tree Visual depiction of the
  requirements in a bill of materials, where all
  components are listed by levels.

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Product Structure Tree
Figure 15-5
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MRP Processing

• Gross requirements
• Schedule receipts
• Projected on hand
• Net requirements
• Planned-order receipts
• Planned-order releases

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Typical MRP Matrix
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MRP Outputs

• Planned orders - schedule indicating the amount
  and timing of future orders.
• Order releases - Authorization for the execution
  of planned orders.
• Changes - revisions of due dates or order
  quantities, or cancellations of orders.

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MRP Secondary Reports

• Performance-control reports
• Planning reports
• Exception reports

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Other Considerations

• Safety Stock
• Lot sizing
• Lot-for-lot ordering
• Economic order quantity
• Fixed-period ordering
• Part-period model

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MRP Planning
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MRP in Services

• Food catering service
• End item gt catered food
• Dependent demand gt ingredients for each recipe,
  i.e. bill of materials
• Hotel renovation
• Activities and materials exploded into
  component parts

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Benefits of MRP

• Low levels of in-process inventories
• Ability to track material requirements
• Ability to evaluate capacity requirements
• Means of allocating production time

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Requirements of MRP

• Computer and necessary software
• Accurate and up-to-date
• Master schedules
• Bills of materials
• Inventory records
• Integrity of data

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MRP Problem 1

• Suppose you are to produce 100 units of product A
  in period 8 with the product structure shown
  below. If no stock is on hand or on order,
  determine when to release orders for each
  component and the size of each order. Product A
  with a lead time of 4 periods is made from
  components B and C with lead times of 3 and 2
  periods, respectively C is made from components
  D and E with a lead time of 1 period each.

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MRP Problem 1

• Product Structure

A
B (1)
C (2)
D (1)
E (2)
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MRP Problem 1 - Solution
    Master Production
Schedule (MPS)
   
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MRP Problem 1 - Solution (cont.)

• The following can be calculated in this problem
  since there is zero available-on-hand for item A
  and all of its components.
• End Item A Requirements 100
• Component B Requirements 100
• Component C Requirements 200
• Component D Requirements 200
• Component E Requirements 400

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MRP Problem 1 Solution (cont.)
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MRP Problem 1 Solution (cont.)
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MRP Problem 1 Solution (cont.)
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MRP Problem 1 Solution (cont.)
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MRP Problem 1 Solution (cont.)
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MRP Problem 2

• In the MRP table below, indicate the available on
  hand requirements, the planned order receipts,
  and the planned order releases. The lead-time is
  two periods. Available on hand are 20 units.
  Consider a) the lot size is the same as the net
  requirements Lot-For-Lot (LFL) or lot size 1
  and b) lot size equals 15.

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MRP Problem 2
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (a)- Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 2 (b) - Solution
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MRP Problem 3

• A company produces two products Product A and
  Product Q. The owner has received an order from
  a customer of 103 units of product A for week 8
  and 200 units of product Q for week 7. The
  product structures and other pertinent
  information are given below in the table as well
  as on top of each MRP table. Develop a materials
  requirements plan that will provide the customer
  the two products.

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MRP Problem 3
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MRP Problem 3 - Solution
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP Problem 3 Solution (cont.)
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MRP II

• Expanded MRP with and emphasis placed on
  integration
• Financial planning
• Marketing
• Engineering
• Purchasing
• Manufacturing

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MRP II
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ERP

• Enterprise resource planning (ERP) An expanded
  effort to integrate standardized record-keeping
  that will permit information sharing throughout
  the organization

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MRP II and ERP Systems

• Expanded MRP with and emphasis placed on
  integration
• Financial planning
• Marketing
• Engineering
• Purchasing
• Manufacturing
• Other Capabilities