MRP Flashcards
MRP
Material requirements planning (MRP)
MRP has the managerial objective of
providing
The right part at the right
time” to meet the production
schedules for finished products.
MRP provides formal plans for each
part number–sub-assemblies,
components, and raw materials.
Independent demands MRP
Finished products (end items)
Dependent demands
: MRP
sub-assemblies,
components, and raw materials.
MRP is planning for items
with dependent
demands
PAB
= Projected Available Balance
SR
= Scheduled Receipt
represent the total planned usage for the item from all sources
PR =
= Planned Receipt
POR =
= Planned Order Release
SS =
= Safety Stock requirement
LT
Lead Time
OH
= On-Hand inventory
Lot-for-lot (L4L)
Order as much as
needed
Fixed order quantity (FOQ)
Order a multiple of a fixed quantity
Periodic order quantity (POQ)
Order for requirements over a fixed number of
periods
MRP Technical Issues
Frequency of MRP Processing Regeneration vs net change Firm planned orders Safety stock and safety leadtime Planning horizon Master production scheduling vs. MRP
Frequency of MRP Processing
Less frequent processing results in an out-of -date picture More frequent processing increases computer costs and may lead to system nervousness
Regeneration vs Net Change
Recalculating all records and requirements is
called
regeneration
Net change
approach only recalculates those
records that have experienced changes
Firm Planned Orders
Regeneration of the MRP records can lead to a large number of planned order changes To avoid this, a planned order can be converted to a firm planned order (FPO)
Safety Stock and Safety
Leadtime
Safety stock is buffer stock held in addition to the
quantity needed to satisfy gross requirements
Used when quantity uncertainty is the issue
Safety leadtime changes both the release and
due date of shop and/or purchase orders to
provide a margin for error
Used when leadtime uncertainty is the issue
Using safety leadtime is not the same as
increasing leadtime
•
Increasing leadtime changes only the release date
Planning Horizon
Planning horizon is the total amount of time
included in MRP calculations
Longer planning horizon increases computational
requirements
Shorter planning horizon may result in less-effective
plans if significant future demand is not visible
At a minimum, the planning horizon should cover the
cumulative lead time for all finished goods items
Master Production Scheduling
vs. MRP
Master production scheduling and MRP logics are
similar
The only difference is in determining requirements
In master production scheduling, projected requirements
are determined from demand forecasts and customer
orders
In MRP, GRs are determined from production plans of
parent items
Master production scheduling and MRP can be
performed together or separately
Bottom-Up Replanning
Botton-up replanning means using pegging
data to solve material shortage problem
