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Manufacturing Requirement Planning MRP

 

Contents

2-6 Months for Specific Units and Work Centers

Weekly / Daily

To ensure that the finished goods required by customers, and the materials and intermediate products required by production are available at the right time and in the right quantities with a minimum of unnecessary inventory (including raw material, WIP and finished goods).

 

  • Phantom bills

    • transient subassemblies

    • never stocked

    • immediately consumed in next stage

  • K-bills

    • group small, loose parts under pseudoitem #

    • reduces paperwork

  • Modular bills

    • product assembled from major subassemblies & customer options

    • modular bill kept for each major subassembly

    • simplifies forecasting & planning

LEVEL

ITEM

Unit of Measure

Quantity 

0 - - - -

Clipboard

Ea

1

- 1 - - -

Clip Assembly

Ea

1

- - 2 - -

Top Clip

Ea

1

- - - 3 -

Sheet Metal

In2

8

- - 2 - -

Bottom Clip

Ea

1

- - - 3 -

Sheet Metal

In2

8

- - 2 - -

Pivot

Ea

1

- - - 3 -

Iron Rod

In

3

- - 2 - -

Spring

Ea

1

- - - 3 -

Spring Steel

In

10

- 1 - - -

Rivet

Ea

2

- 1 - - - 

Board

Ea

1

- - 2 - - 

Press Board

Ea

1

- - 2 - - 

Finish

Oz

2

 

  • Phantom bills

    • transient subassemblies

    • never stocked

    • immediately consumed in next stage

  • K-bills

    • group small, loose parts under pseudoitem #

    • reduces paperwork

  • Modular bills

    • product assembled from major subassemblies & customer options

    • modular bill kept for each major subassembly

    • simplifies forecasting & planning

Description

 

Inventory Policy 

 

Item

Board

Lead time

2

Item no.

7341

Annual demand

5000

Item type

Manuf.

Holding cost

1

Prod/sales 

Ass’y

Ordering/setup cost

50

Value class

B

Safety stock 

25

Buyer/planner

RSR

Reorder point

39

Vendor

7142

EOQ

316

Phantom code

N

Minimum order qty

100

Unit price/cost

1.25

Maximum order qty

500

Pegging

Y

Multiple order qty

100

 

Physical Inventory

 

Usage/Sales 

 

On hand

100

YTD usage/sales

1100

Location

W142

MTD usage/sales

75

On order

50

YTD receipts

1200

Allocated

75

MTD receipts

0

Cycle

3

Last receipt

45870

Difference

-2

Last issue

38482

Codes 

 

Cost acct.

754

 

Routing

326

 

Engr

7142

 

  • Lot Sizing

  • Fixed Quantities:  FOQ - EOQ

  • Variable Quantities

  • Fixed period : LFL - FPR – POQ

  • Variable period : LTC – LUC – LPC - PPB

  • Buffering

  • Safety stock - Safety lead time – Hedging - Dynamic Safety Stock - Slack in the system (spare capacity)

  • Planning Techniques

  • Linear programming (MS Excel Solver if the company has no ERP application)

  • Target: Minimize Average PAB

  • Constraints: Customer Orders, Batch Size, Minimum Balance, Customer Orders, m/c Capacities

  • Outputs

  • Planed Order Release

  • Project Available Balance PAB

Type 1

PART________

Period

1

2

3

4

5

6

7

8

9

10

11

12

Gross requirements

 

 

 

 

 

 

 

 

 

 

 

 

Scheduled receipts

 

 

 

 

 

 

 

 

 

 

 

 

Projected available balance

 

 

 

 

 

 

 

 

 

 

 

 

 

Planned order releases

 

 

 

 

 

 

 

 

 

 

 

 

Lead time = _____

Lot size = ________

Safety Stock = ________

Gross requirements: anticipated future usage of (or demand for) the item during each period.

Scheduled receipts: existing replenishment orders for the item due in at the beginning of each period.

Projected available balance: current and projected inventory status for the item at the end of each period.

Planned order releases: planned replenishment orders for the item at the beginning of each period.

Type 2

PART________

Period

1

2

3

4

5

6

7

8

9

10

11

12

Gross requirements

 

 

 

 

 

 

 

 

 

 

 

 

Scheduled receipts

 

 

 

 

 

 

 

 

 

 

 

 

Projected on hand

 

 

 

 

 

 

 

 

 

 

 

 

 

Net requirements

 

 

 

 

 

 

 

 

 

 

 

 

Planned order receipts

 

 

 

 

 

 

 

 

 

 

 

 

Planned order releases

 

 

 

 

 

 

 

 

 

 

 

 

Lead time = ______

Lot size = ________

Safety Stock = ________

Gross requirements: anticipated future usage of (or demand for) the item during each period.

Scheduled receipts: existing replenishment orders for the item due in at the beginning of each period.

Projected on hand: projected inventory status for the item at the beginning of each period.

Net requirements: calculated as Gross Requirements minus Scheduled Receipts minus Projected on hand.

Planned order receipt: planned receipt of replenishment orders at the beginning of the period.

Planned order releases: release of planned replenishment orders for the item using lead-time offset.

Type 3

ITEM:

 

LLC:  

 

Lot Size:

 

LT:

 

 

PD

1

2

3

4

5

6

7

Gross Requirements 

               

Scheduled Receipts 

               

Projected On Hand 

               

Net Requirements 

               

Planned Order Receipts 

               

Planned Order Releases 

               
  • Item name or number identifying scheduled item

  • LLC  low-level-code; lowest level at which item appears in a product structure

  • Lot size order multiples of this qty; can be min/max qty

  • LT (lead time)-time from order placement to receipt

  • PD (past-due)-orders behind schedule

  • Gross requirements-demand for item by time period

  • Scheduled receipt

  •  quantity already on order & receipt date

  •  released orders become scheduled receipts

  • Projected on hand - expected on-hand inventory at end of period

  • Net requirements - net amount needed after on-hand adjustments

  • Planned order receipts - net requirements adjusted for lot-sizing

  • Planned order releases - planned order receipts offset by lead time

 Example 1

Item no:

 

Lead Time:

0

 

 

Description:

 

Dynamic Safety Stock 2 periods

60

 

 

On Hand

50

Lot Sizing:

LFL

 

 

 

Period

Sum

 

1

2

3

4

5

6

Gross Requirements

30

30

30

30

30

30

180

Scheduled Receipts

30

 

 

 

 

 

30

Projected Available Balance PAB
= Previous  PAB + Scheduled Receipt +  Planned Order Released  – Gross Requirements

50

60

60

60

60

60

60

410

Planned Order Releas
= Gross Requirements - Scheduled Receipt - PAB + SS

10

30

30

30

30

30

160

 Example 2

 

Item

On Hand

Scheduled Receipts

  Lot Size

MPS 

10

0

1

100, period 8 

5

0

1

- - - 

140

0

150

- - - 

 

Item: A

LLC: 0

       

Period

       

Lot size: 1

LT: 3

PD

1

2

3

4

5

6

7

8

Gross requirements

               

100

Scheduled receipts

                 

Projected on hand

10

10

10

10

10

10

10

10

0

Net requirements

               

90

Planned order receipts

               

90

Planned order releases

         

90

     

 

Item: B

LLC: 1

       

Period

       

Lot size: 1

LT: 4

PD

1

2

3

4

5

6

7

8

Gross requirements

           

270

     

Scheduled receipts

                   

Projected on hand

 

5

5

5

5

5

0

0

0

0

Net requirements

           

265

     

Planned order receipts

           

265

     

Planned order releases

   

265

             

 

Item: C

LLC: 1

       

Period

       

Lot size: 150

LT: 2

PD

1

2

3

4

5

6

7

8

Gross requirements

         

180

     

Scheduled receipts

                 

Projected on hand

140

140

140

140

140

110

110

110

110

Net requirements

         

40

     

Planned order receipts

         

150

     

Planned order releases

     

150

         

 

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