Example: MRP Schedule

1

Example: MRP Schedule

LocoMopeds is a manufacturer of off-road mopeds. The following product structure diagram represents the bill of materials for its dual-carburetor Model 442 moped.

MOPED

ENGINEASSEMBLY

MOTOR CARBURETOR(2)

GASTANK

WHEELASSEMBLY

(2)

HUB ASSEMBLY TIRE

FRAME

Level 0

Level 1

Level 2

2


Bill of MaterialParent Component Level Compon.Code Code Code Description Req’d

442 0 #442 Moped442 EA 1 Engine Assem. 1

GT 1 Gas Tank 1WA 1 Wheel Assem. 2F 1 Frame 1

EA M 2 Motor 1C 2 Carburetor 2

WA HA 2 Hub Assem. 1T 2 Tire 1

3


Inventory Status ReportItemCode

On-Hand

SafetyStock

LotSize

LeadTime

Sched. ReceiptsQnty. Week

442 500 200 LFL 1 -- --

EA 300 100 500 1 1000 10

GT 600 200 LFL 2 900 10

WA 500 400 500 1 2000 10

F 600 0 2000 3 2000 10

M 250 0 LFL 1 -- --C 150 100 2000+ 2 -- --

HA 100 0 LFL 1 2400 11

T 500 500 1000 3 3000,2000 11,12

4


The company is currently planning production for weeks 10 through 16. Based on existing orders and demand forecasts, the master production schedule is as follows:

Master Production Schedule: #442 Moped

Determine the MRP schedule required to support the master production schedule for the Model 442 moped in weeks 10-16.

11

1300 800 1200 1400

10 1615141312

0 1000 0

WEEK

QUANTITY

5


MRP Schedule for #442 Mopeds for Weeks 10 - 16, considering that:

Gross Requirements come from the moped MPS There is an On-Hand balance of 500 mopeds at the

end of week 9 There are no Scheduled Receipts for mopeds A lot-for-lot rule is used for ordering mopeds Safety stock of 200 mopeds is desired Lead time for mopeds is one week

6


MRP Schedule for #442 Mopeds . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS

AVAILABLE (ON-HAND = 500)

NET REQUIREMENTS

PLANNED ORDER RECEIPTS

PLANNED ORDER RELEASES

ITEM: 442 MOPED LT: 1 LOT SIZE: LFL SS: 200

0

10

1000 0

11 12 13

1300 800

1514

14001200

16WEEK

7


MRP Schedule for #442 Mopeds . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: 442 MOPED LT: 1 LOT SIZE: LFL SS: 200

0

300

1000

10

1000

1000

300

1300

1300

0

0

11 12 13

1300

1200800

1200800

14001200

1300

1300

800

000 0

1400

800

15

1400

14

14001200

16WEEK

8


MRP Schedule for Gas Tanks for Weeks 10 - 16, considering that:

Gross Requirements come from moped Planned-Order-Releases

There is an On-Hand balance of 600 gas tanks at the end of week 9

There is a Scheduled Receipt for 900 tanks in week 10

A lot-for-lot rule is used for ordering gas tanks Safety stock of 200 gas tanks is desired Lead time for gas tanks is two weeks

9


MRP Schedule for Gas Tanks . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: GAS TANK LT: 2 LOT SIZE: LFL SS: 200

1000

900

10

0 1300

11 12 13

800 1200

1514

01400

16WEEK

10


MRP Schedule for Gas Tanks . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: GAS TANK LT: 2 LOT SIZE: LFL SS: 200

1000

900

1300

1000

10

800

0

1200

300

1300

11 12 13

800

1200

1400

1200

1514

01400

16WEEK

300 000

1000

1000 800

800

1400

14001200

0

11


MRP Schedule for Frames for Weeks 10 - 16, considering that:


There is an On-Hand balance of 600 frames at the end of week 9

There is a Scheduled Receipt for 2000 frames in week 10

The firm uses a Lot Size (multiple) of 2000 for ordering frames

No safety stock of frames is desired Lead time for frames is 3 weeks

12


MRP Schedule for Frames . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS

AVAILABLE

NET REQUIREMENTS



ITEM: FRAME LT: 3 LOT SIZE: 2000 SS: 0

1000

2000

10

0 1300

11 12 13

800 1200

1514

01400

16WEEK

600

13


MRP Schedule for Frames . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: FRAME LT: 3 LOT SIZE: 2000 SS: 0

1000

2000

1600

0

2000

10

1600

0

2000

1600

1300

11 12 13

800

2000

500

2000

300300 900

0

1200

1514

01400

16WEEK

0 0

1500

0 1100

14


MRP Schedule for Engine Assemblies for Weeks 10 - 16, considering that:


There is an On-Hand balance of 300 engine assemblies at the end of week 9

There is a Scheduled Receipt for 1000 engine assemblies in week 10

The firm uses a Lot Size (multiple) of 500 for ordering engine assemblies

Safety Stock of 100 engine assemblies is desired Lead time for engine assemblies is 1 week

15


MRP Schedule for Engine Assemblies . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: ENGINE ASSEM. LT: 1 LOT SIZE: 500 SS: 100

1000

1000

10

0

1300

11 12 13

800 1200

1514

01400

16WEEK

16


MRP Schedule for Engine Assemblies . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: ENGINE ASSEM. LT: 1 LOT SIZE: 500 SS: 100

1000

1000

200

10

1500

200

0

500

1500

1100

200

1300

11 12 13

800

10001100

10001500

1000

400

500

1500

400100400 0

1200

1514

01400

16WEEK

17


MRP Schedule for Motors for Weeks 10 - 16, considering that:

Gross Requirements come from engine assembly Planned-Order-Releases

There is an On-Hand balance of 250 motors at the end of week 9

There are no Scheduled Receipts for motors A lot-for-lot rule is used for ordering motors No Safety Stock of motors is desired Lead time for motors is 1 week

18


MRP Schedule for Motors . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: MOTOR LT: 1 LOT SIZE: LFL SS: 0 10

1500

500

11 12 13

1500

1000

1514 16WEEK

19


MRP Schedule for Motors . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: MOTOR LT: 1 LOT SIZE: LFL SS: 0

250

1250

10

1250

500

1250

250

1500

1500

500

500

0

500

11 12 13

1500

1000

1000

1500

1500

1000

000 0

1000

1514 16WEEK

20


MRP Schedule for Carburetors for Weeks 10 - 16, considering that:

Gross Requirements come from engine assembly Planned-Order-Releases (times 2)

There is an On-Hand balance of 150 carburetors at the end of week 9

There are no Scheduled Receipts for carburetors A Lot Size of 200+ is used for ordering carburetors Safety Stock of 100 carburetors is desired Lead time for carburetors is 2 weeks

21


MRP Schedule for Carburetors . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: CARBURETOR LT: 2 LOT SIZE: 2000+ SS: 100 10

3000 1000

11 12 13

3000 2000

1514 16WEEK

22


MRP Schedule for Carburetors . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: CARBURETOR LT: 2 LOT SIZE: 2500+ SS: 100

50

2500

10

2500

3050

3000

3000

2500

2500

950

50

1000

11 12 13

3000

950

2500

1450

2500

155010501550 1550

2000

1514 16WEEK

23


MRP Schedule for Wheel Assemblies for Weeks 10 - 16, considering that:

Gross Requirements come from moped Planned-Order-Releases (times 2)

There is an On-Hand balance of 500 wheel assemblies at the end of week 9

There is a Scheduled Receipt for 2000 wheel assemblies in week 10

A Lot Size (multiple) of 500 is used for ordering wheel assemblies

Safety Stock of 400 wheel assemblies is desired Lead time for wheel assemblies is 1 week

24


MRP Schedule for Wheel Assemblies . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: WHEEL ASSEM. LT: 1 LOT SIZE: 500 SS: 400

2000

2000

10

0

2600

11 12 13

1600 2400

1514

02800

16WEEK

25


MRP Schedule for Wheel Assemblies . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: WHEEL ASSEM. LT: 1 LOT SIZE: 500 SS: 400

2000

2000

2100

10

2500

100

0

2000

2500

2500

100

2600

11 12 13

1600

28002000

30002000

3000

1600

2000

2000

04000 200

2400

1514

02800

16WEEK

26


MRP Schedule for Hub Assemblies for Weeks 10 - 16, considering that:

Gross Requirements come from wheel assembly Planned-Order-Releases

There is an On-Hand balance of 100 hub assemblies at the end of week 9

There is a Scheduled Receipt of 2400 hub assemblies in week 11

A lot-for-lot rule is used for ordering hub assemblies No Safety Stock of hub assemblies is desired Lead time for hub assemblies is 1 week

27


MRP Schedule for Hub Assemblies . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: HUB ASSEM. LT: 1 LOT SIZE: LFL SS: 0

0

10

2400

2500

2000

11 12 13

2000

3000

1514

00

16WEEK

28


MRP Schedule for Hub Assemblies . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: HUB ASSEM. LT: 1 LOT SIZE: LFL SS: 0

0

100

10

2000

2500

2400

2500

2000

2000

2000

0

2000

11 12 13

2000

3000

3000

2000

2000

3000

000 0

3000

1514

00

16WEEK

29


MRP Schedule for Tires for Weeks 10 - 16, considering that:

Gross Requirements come from wheel assembly Planned-Order-Releases

There is an On-Hand balance of 500 tires at the end of week 9

There are Scheduled Receipts for 3000 and 2000 tires weeks 11 and 12, respectively

A Lot Size (multiple) of 1000 is used for ordering tires

Safety Stock of 500 tires is desired Lead time for tires is 3 weeks

30


MRP Schedule for Tires . . . Initially

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: TIRE LT: 3 LOT SIZE: 1000 SS: 500

0

10

3000

2500 2000

2000

11 12 13

2000

3000

1514

00

16WEEK

31


MRP Schedule for Tires . . . Completed

GROSS REQUIREMENTS

SCHEDULED RECEIPTS


NET REQUIREMENTS



ITEM: TIRE LT: 3 LOT SIZE: 1000 SS: 500

0

0

2000

10

3000

3000

3000

2500

2500

2000

2000

11 12 13

2000

2500

3000

1500

2000

500 500500 500

3000

1514

00

16WEEK

32

Issues in MRP

Management Commitment User involvement Education and training Selection of S/W packages Data accuracy Realistic MPS Realistic lead times Maintaining accurate BOM files

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Lot-Sizing in MRP

Lot-size is the quantity ordered/produced at one time Large lots are preferred because:

Changeovers cost less and capacity greater Annual cost of purchase orders less Price breaks and transportation breaks can be

utilized Small lots are preferred because:

Lower inventory carrying cost Reduced risk of obsolescence Shorter cycle time to produce customer order

34

Lot-Sizing Methods in MRP

Economic Order Quantity (EOQ) does not consider quantity discounts does not always provide the most economical

approach with lumpy demands Lot-for-Lot (LFL)

accommodates lumpy demand Period Order Quantity (POQ) Many others

35

Lot-Sizing Methods in MRP

The best lot-sizing method, resulting in least cost,

depends on cost and demand patterns

36

Lot-Sizing in MRP

Lot-size is the quantity ordered/produced at one time Large lots are preferred because:

Changeovers cost less and capacity greater Annual cost of purchase orders less Price breaks and transportation breaks can be

utilized Small lots are preferred because:

Lower inventory carrying cost Reduced risk of obsolescence Shorter cycle time to produce customer order

37

The best method, resulting in least cost,depends on cost and demand patterns.

Lot-Sizing Methods

Economic Order Quantity (EOQ) does not consider quantity discounts does not always provide the most economical

approach with lumpy demand Lot-for-Lot (LFL)

accommodates lumpy demand Period Order Quantity (POQ)

38

Evaluation of MRP

Most beneficial to process-focused systems that have long processing times and complex multistage production steps

Lead times must be reliable Must freeze MPS for some time before actual

production... certain demand Difficult to implement

39

Closed Loop MRP

Production PlanningMaster Production Scheduling

Material Requirements PlanningCapacity Requirements Planning

Realistic?

NoFeedback

Execute:Capacity PlansMaterial Plans

Yes

Feedback

40

Closed Loop MRP

Materials Management at Washburn Guitar, Inc.

41

Manufacturing Resource Planning (MRP II)

Goal: Plan and monitor all resources of a manufacturing firm (closed loop):

Manufacturing Marketing Finance EngineeringShop-floor control

Simulation capability of the manufacturing system

42

Enterprise Resource Planning (ERP)

ERP systems available today integrate manufacturing with other functional areas in an organization

ERP systems make it easier for management to obtain local information about performance of specific processes, bottlenecks resources, and products (or product groups), etc.

Class I ERP software packages (for large companies) include BAAN, SAP, and Oracle

43

MRP II System

MRP II System

44

MRP I to MRP II

MRP I simply exploded demand (MPS) into required materials

MRP II became Manufacturing Resource Planning which provides a closed-loop business management system

Financial management Shop floor control Operations management Simulation capability

45

Capacity Requirements Planning (CRP)

46

Capacity Requirements Planning (CRP)

Tests MPS for feasibility Utilizes routings to determine labor/machine loads If schedule feasible, recommends freezing If schedule overloads resources, points out processes

that are overscheduled

47

Load Schedules

Compares actual labor and machine hours against available hours

Offsets schedules between successive stages of production by lead times

Provides feasible MPS and economically loaded work centers

Promotes system operating efficiency ... lowers costs!

48

World-Class Practice

Lead times respond to conditions Product development as levels of product structure

tree Lead times that adjust to load MRP reports shared with customers and suppliers

Documents

Example: MRP Schedule