week 12 mrp july
TRANSCRIPT
-
7/27/2019 Week 12 MRP July
1/44
Outcome 4:Use software-generated information to make decisions at
operational, tactical and strategic levels in an organization.
Assessment Criteria:4.3 Prepare a spreadsheetto enable material
requirements planning and calculate economic order
quantities.
-
7/27/2019 Week 12 MRP July
2/44
Manufacturing
computer information
system
Determines quantity &
timing of dependent
demand items
1 2 3 4 5
Gross Requirements 2 20 25 15
Scheduled Receipts 5 30
Available 25 23 33 33 8
Net Requirements 7
Planned Order Receipts 7
Planned Order Releases 7
-
7/27/2019 Week 12 MRP July
3/44
Demand for one item is related to the demand for
another item.
Consider Ford Explorer:
Fords demand for auto tires and radiators depend on
the production of Explorer.
o 4 tires and 1 radiator go into each finished Explorer.
-
7/27/2019 Week 12 MRP July
4/44
Computer system
Mainly discrete products
Accurate bill-of-material
Accurate inventory status
99% inventory accuracy
Stable lead times
-
7/27/2019 Week 12 MRP July
5/44
Increased customer satisfaction due to meeting
delivery schedules
Faster response to market changes
Improved labor & equipment utilization
Better inventory planning & scheduling
Reduced inventory levels without reduced customerservice
-
7/27/2019 Week 12 MRP July
6/44
1. Master Production Schedule (MPS)
2. Bills of Materials (BOM)
3. Accurate Inventory Records
4. Purchase Orders Outstanding
5. Lead Times for Each Component
-
7/27/2019 Week 12 MRP July
7/44
Specifies WHAT(No. of finished product or item) is tobe made and WHEN
Must accordance with aproduction planwhich: sets the overall level of output in broad terms
MPS tells what is required to satisfy demand and meet the
production plan
Establishes what items to make and when, in terms
of specific products.
Reasonable length of time time takes to produce a
product.
-
7/27/2019 Week 12 MRP July
8/44
Aggregate
Production Plan
Execute capacity plans
Material Requirements
Plan (MRP)
Marketing:
Customer DemandFinance:
Cash flow
Engineering:
Design completion
Human Resources:
Manpower planning
Production:
Capacity Inventory
Management:
Return on Investment
Capital
Procurement:
Supplier performance
Master
Production
Schedule (MPS)
Changeproductionplan?
-
7/27/2019 Week 12 MRP July
9/44
1,2001,500
Aggregate Production Plan(shows the total quantity ofamplifiers
10030075 watt amplifier
450450500500150 watt amplifier
100100100100240 watt amplifier
Master ProductionSchedule (Shows thespecific type and quantity ofamplifier to be produced
87654321Weeks
FebruaryJanuaryMonths
-
7/27/2019 Week 12 MRP July
10/44
Make to Order
(Process Focus)
Assemble toOrder or
Forecast
(Repetitive)
Stock to Forecast
(Product Focus)
Schedule finished
product
Steel, Beer,Bread Lightbulbs, Paper
Print shopMachine shop
Fine dining restaurant
Examples:
Number of end
items
Number of
inputs
Typical focus of the
master production
schedule Scheduleorders
Schedule
modules
Motorcycles, autos,
TVs, fast-food
restaurant
-
7/27/2019 Week 12 MRP July
11/44
List of the raw materials, sub-assemblies, intermediate
assemblies, sub-components, components, parts and the
quantities of each needed to manufacture an end product dovary somewhat in scope
E.g: recipe for cake, specifying ingredients and
quantities/amount, full set of drawings for an ambulance
-
7/27/2019 Week 12 MRP July
12/44
Provides product structure (tree)
Parents: Items above given level
Children: Items below given level
Shows low-level coding
Lowest level in structure item occurs
Top level is 0; next level is 1 etc.
-
7/27/2019 Week 12 MRP July
13/44
Speaker Kits, Inc., packages high-fidelity components for mail order.
Components for the top-of-the-line speaker kit, AiWA II (A),
include 2 standard 12-inch speaker kits (Bs) and 3 standard 12-inch
speaker kits with amp-booster (Cs).
Each B consists of two 12-inch speakers (Ds) and 2 shipping boxeseach with an installation kit (E). Each of the three speaker kits with
amp-booster kits (Cs) has 2 speaker boosters (Fs) and 2 installation
kits (Es). Each speaker booster (F) includes two 12-inch speakers
(Ds) and 1 amp-booster (G). The total for each AiWA II is 4 standard
12-inch speakers and twelve 12-inch speakers with the amp-booster
(Gs).
As we can see, the demand for B, C, D, E, F and G is completely
dependent on the master production schedule for A the AiWA II
speaker kits.
-
7/27/2019 Week 12 MRP July
14/44
A
B(2) Std 12 Speaker kit C(3) Std 12 Speaker kitw/ amp-booster
F(2)Std 12 Speaker booster
assembly
E(2)E(2)
Packing box of
installation kit of wire,
bolts and screwsG(1)
amp-booster
D(2)12 speaker
D(2)12 speaker
Level
0
1
2
3
-
7/27/2019 Week 12 MRP July
15/44
Product structure (tree) for AiWA II Speaker Kit shows
four levels : 0, 1, 2, 3
four parents: A, B, C, F - has at least one level below B, C, D, E, F, G are components (children) has at least
one level above
B, C, F are both parent and component (children)
Number in parentheses ( ) no.of units needed to
make the item immediately above it.
-
7/27/2019 Week 12 MRP July
16/44
Determine the number of units of each item required to
satisfy demand for a new order of 50 AiWA II speaker
kits.
Part A = 50 units Part B = 2 x number of As = 2 (50) = 100
Part C = 3 x number of As = 3 (50) = 150
Part D = 2 x number of Bs + 2 x number of Fs
= 2 (100) + 2 (300) = 800
-
7/27/2019 Week 12 MRP July
17/44
Firm should achieved at least 99% record accurate
Should exist as a by-product of well-managed
purchasing and inventory-control department
Good purchasing data (purchase data execute, recordsof those orders and scheduled delivery dates available)
good production plans effective MRP system.
-
7/27/2019 Week 12 MRP July
18/44
Time required to acquire (purchase, produce or
assemble)
Example 3: Lead times for AiwA II Speaker
Component Lead Time
A 1 week
B 2 weeks
C 1 week
D 1 week
Component Lead Time
E 2 weeks
F 3 weeks
G 2 weeks
-
7/27/2019 Week 12 MRP July
19/44
1 2 3 4 5 6 7 8
A
B
C
D
E
E
F
G
D
2 weeks to
produced
1 week
2 weeks
1 week2 weeks
2 weeks
3 weeks
1 week
1 week
Start production of
D
Must have D and Ecompleted here so
production can begin on B
-
7/27/2019 Week 12 MRP July
20/44
Outcome 4:
Use software-generated information to make decisions at
operational, tactical and strategic levels in an organization.
Assessment Criteria:
4.3 Prepare a spreadsheet to enable material
requirements planning and calculate economic orderquantities.
-
7/27/2019 Week 12 MRP July
21/44
Aggregate Production Plan
Master ProductionSchedule
Material Requirement Plan
Set due dates for theavailability of end items NOT
when end item will be
manufactured
Bill of Material(Product
Structure Tree)
Lead time
Inventory level
-
7/27/2019 Week 12 MRP July
22/44
WEEK LEAD TIME
1 2 3 4 5 6 7 8
A. Required date
Order released date1 week
B. Required date
Order released date 2 weeks
C. Required date
Order released date1 week
E. Required date
Order released date2 weeks
F. Required dateOrder released date
3 weeks
D. Required date
Order released date1 week
G. Required date
Order released date2 weeks
50
100
300
50
150
200
300
600
100
150
300200
300
600
200
200
300
300
= Lead Time BOM Lead Time
-
7/27/2019 Week 12 MRP July
23/44
Example 4 : Gross MRP
- assumes that there is no inventory on hand
If there is inventory on hand
net requirement plan include:
i. gross requirement ii. on-hand inventory
ii. net requirements
iv. planned order receipt (quantity planned to be
received at a future date)
v. planned order release (schedule date for an order to
be released)
-
7/27/2019 Week 12 MRP July
24/44
ITEM ON HAND
A
B
C
D
EF
G
10
15
20
10
105
0
Constructing a netrequirements plan is similar to
constructing a GRP.
Stating with item A - workbackward to determine net
requirements for all item.
-
7/27/2019 Week 12 MRP July
25/44
LotSize
LeadTime
(weeks)
OnHand
SafetyStock
Allo-cated
Low-level
Code
ItemIdenti-
fication
Week1 2 3 4 5 6 7 8
Gross Requirements
Schedule Receipts
Project On
Hand
Net RequirementPlanned Order
Receipts
Planned Order
Releases
Refer to product structure, on-hand inventory, and lead times.i. ITEM A:Gross requirement = 50 units (at week 8), item on-hand = 10 units
net requirement & planned order receipt
= 50 10 = 40 units (at week 8)
Lead times = 1 week, so planned order release = week 7 (40 units)
-
7/27/2019 Week 12 MRP July
26/44
LotSize
LeadTime
(weeks)
OnHand
SafetyStock
Allo-cated
Low-level
Code
ItemIdenti-
fication
Week1 2 3 4 5 6 7 8
Gross
Requirements
Schedule Receipts
Project OnHand
Net Requirement
Planned Order
Receipts
Planned Order
Releases
Lot-
for-
lot
1 10 - - 0 A 50
101010101010101010
40
40
40
Lead Time
of 1 week
B C
-
7/27/2019 Week 12 MRP July
27/44
ii. ITEM B:Gross requirement = 100 units (week 7) - BA
item on-hand = 15 units
** Requirement for item B depends on the net requirement of
A:net requirement for A = 40
Requirement for BA= 2(40) = 80 (at week 7)
net requirement & planned order receipts for BA
= 80 15 = 65 (at week 7)
Lead times = 2 week, so planned order release
= 65 (week 5)
PT TP
-
7/27/2019 Week 12 MRP July
28/44
LotSize
LeadTime
(weeks)
OnHand
SafetyStock
Allo-cated
Low-level
Code
ItemIdenti-
fication
Week1 2 3 4 5 6 7 8
Gross
Requirements
Schedule Receipts
Project OnHand
Net Requirement
Planned Order
Receipts
Planned Order
Releases
Lot-
for-
lot
2 15 - - 1 B 80
1515151515151515
65
65
65
Lead Time
of 2 weeks
E D
-
7/27/2019 Week 12 MRP July
29/44
iii. ITEM C:Gross requirement = 150 units (week 7) - CA
item on-hand = 20 units
** Requirement for item C depends on the net requirement of
A:net requirement for A = 40
Requirement for CA= 3(40) = 120 (at week 7)
net requirement & planned order receipts for CA
= 120 20 = 100 (at week 7)
Lead times = 1 week, so planned order release
= 100 (week 6)
-
7/27/2019 Week 12 MRP July
30/44
LotSize
Lead
Time
(weeks)
OnHand
SafetyStock
Allo-cated
Low-
level
Code
Item
Identi-
fication
Week1 2 3 4 5 6 7 8
Gross
Requirements
Schedule Receipts
Project OnHand
Net Requirement
Planned Order
Receipts
Planned Order
Releases
Lot-
for-
lot
1 20 - - 1 C 120
2020202020202020
100
100
100
Lead Time
of 1 week
E F
-
7/27/2019 Week 12 MRP July
31/44
-
7/27/2019 Week 12 MRP July
32/44
ITEM E:Gross requirement = 300 units (week 6) - Ec
** Requirement for item E is also depends on the net
requirement of C:net requirement for C = 100
Requirement for EC = 2(100) = 200 (at week 6)
net requirement & planned order receipts for EC
= 200 (**no more on-hand inventory for item E, after been
used for B)
Lead times = 2 weeks, so planned order release
= 200 (week 4)
Net E
-
7/27/2019 Week 12 MRP July
33/44
-
7/27/2019 Week 12 MRP July
34/44
v. ITEM F:Gross requirement = 300 units (week 6) - FC
item on-hand = 5 units
** Requirement for item F depends on the net requirement of
C:net requirement for C = 100
Requirement for FC= 2(100) = 200 (at week 6)
net requirement & planned order receipts for FC
= 200 5 = 195 (at week 6)
Lead times = 3 week, so planned order release
= 195 (week 3)
-
7/27/2019 Week 12 MRP July
35/44
LotSize
Lead
Time
(weeks)
OnHand
SafetyStock
Allo-cated
Low-
level
Code
Item
Identi-
fication
Week1 2 3 4 5 6 7 8
Gross
Requirements
Schedule
Receipts
Project On
Hand
Net Requirement
Planned Order
Receipts
Planned OrderReleases
Lot-
for-
lot
3 5 - - 2 F 200C
555555
195
195
195
5
Lead Time
of 3 weeks
D G
-
7/27/2019 Week 12 MRP July
36/44
vi. ITEM D:Gross requirement = 600 units (week 5) - DF
= 200 units (week 6) - DB
item on-hand = 10 units
** Requirement for item D depends on the netrequirement of F:
net requirement for F = 195
Requirement for DF = 2(195) = 390 (at week 3)
net requirement & planned order receipts for DF
= 390 - 10= 380 (at week 3)
Lead times = 1 weeks, so planned order release
= 380 (week 2)Net D
-
7/27/2019 Week 12 MRP July
37/44
ITEM D:Gross requirement = 200 units (week 6) - DB
item on-hand = 10 units
** Requirement for item D is also depends on the net
requirement of B:
net requirement for B = 65
Requirement for DB = 2(65) = 130 (at week 5)
net requirement & planned order receipts for DB
= 130 (**no more on-hand inventory for item D - after been
used for F)
Lead times = 1 weeks, so planned order release
= 130 (week 4)Net D
-
7/27/2019 Week 12 MRP July
38/44
-
7/27/2019 Week 12 MRP July
39/44
-
7/27/2019 Week 12 MRP July
40/44
LotSize
Lead
Time
(weeks)
OnHand
SafetyStock
Allo-cated
Low-
level
Code
Item
Identi-
fication
Week1 2 3 4 5 6 7 8
Gross
Requirements
Schedule
Receipts
Project On
Hand
Net Requirement
Planned Order
Receipts
Planned OrderReleases
Lot-
for-
lot
2 0 - - 3 G 195F
0000
195
195
195
Lead Time
of 2 weeks
Complete MRP
http://localhost/var/www/apps/conversion/tmp/examples%20excel/MRPtemplate.xlsxhttp://localhost/var/www/apps/conversion/tmp/examples%20excel/MRPtemplate.xlsx -
7/27/2019 Week 12 MRP July
41/44
Assessment Criteria:
4.3 Prepare a spreadsheetto enable material
requirements planningand calculate economic order
quantities.
-
7/27/2019 Week 12 MRP July
42/44
BOM
Lead Times
(Item Master File)
Inventory Data
Purchasing data
Master Production
Schedule
MRP
planning
programs
(computer
and
software)
MRP by Period Report
MRP by date report
Planned order report
Purchase advice
Exception report
-
7/27/2019 Week 12 MRP July
43/44
A BOM AiWAIILead
Time1 Lot Size
Minimum
quantity
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8
Gross Requirements 50
Schedule Receipts
Project OnHand
10 10 10 10 10 10 10 10 10
Net Requirement 40
Planned Order Receipts 40
Planned Order Releases 40
-
7/27/2019 Week 12 MRP July
44/44
A BOM AiWAIILead
Time1 Lot Size
Minimum
quantity
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8
Gross Requirements=BOM!$G
$7
Schedule Receipts
Project OnHand =BOM!$
E$7=BOM!$E
$7
=BOM!$E
$7
=BOM!$E
$7
=BOM!$E
$7
=BOM!$E
$7
=BOM!$E
$7
=BOM!$E
$7
=BOM!$E
$7
Net Requirement=$L$7-
$L$9
Planned Order Receipts =$L$10
Planned Order Releases =$L$11
AiWAII Speaker Kit - MRP Excel
http://localhost/var/www/apps/conversion/tmp/examples%20excel/MRP.xlsxhttp://localhost/var/www/apps/conversion/tmp/examples%20excel/MRP.xlsx