Material Requirements Planning (MRP)

·         Planning and Control (1-4 = Planning; 5=Execution)

 

1.      Business Plan

 

2.      Production Plan

 

3.      Master Production Schedule (MPS)

 

4.      Material Requirements Planning (MRP)

 

5.      Production Activity Control and Purchasing

 

 

·         MRP Answers:

 

o   What do you need?

 

o   How much/many do we need?

 

o   When do we need it?

 

o   What are the priorities?

 

 

·         MRP Inputs

 

o   MPS:  provides information on scheduled and planned orders for each end item, such as how much is wanted and when

 

o   Inventory Status:  what’s available, what’s on order, and status of each inventory load

 

o   Bill of Materials (BOM):  list of components and quantities required of each to produce 1 finished output

 

o   Planning Data:  lot size, lead time, yield/scrap factors, and safety stock

 

 

 

·         Bill of Materials

 

o   List of all components to make one output

 

o   Each component has a unique part number

 

o   Parent-component relationships

 

 

·         Pegging and Where-Used Data

 

o   Pegging:  Shows the parents creating the demand for the component, the quantities needed, and when

 

o   Where-Used:  Lists all parents in which a component is used, whether there is a demand for the parent or not

 

 

·         Lead Time, Exploding, and Offsetting

 

o   Lead Time:  Time from when an order is placed to when the part is ready for use

 

o   Exploding:  Multiplying parent requirements by the usage quantities through the product tree

 

o   Offsetting:  Placing requirements in their proper time periods based on lead time

 

 

·         Gross and Net Requirements

 

o   Net Requirements = Gross Requirements – Available Inventory

 

o   Example

 

§  Gross Requirements: 100

 

§  Available Inventory:  -30__

 

§  Net Requirements:      70

 

 

·         Steps in Releasing Planned Orders

 

o   Check availability of components

 

o   Create shop packet on purchase requisition

 

o   Allocate components to that order

 

o   Release planned order, creating a scheduled receipt

 

 

·         Using the MRP

 

o   MRP Logic will

 

§  Gross, Net, Offset, and explode requirements

 

§  Create planned orders

 

§  Keep priorities current

 

o   Computer software can provide exception or action messages

 

o   Planners actions include:

 

§  Releasing planned orders

 

§  Rescheduling open orders

 

§  Changing order quantities

 

§  Working with others to solve problems

One Comment (+add yours?)

  1. Lisa
    Oct 12, 2016 @ 03:07:23

    I’ve searched many websites to find a simplified explanation for calculating gross and net requirements (exploding and offsetting using a product tree BOM). They show the chart with the inputted data/numbers/information, but no simple explanation as to how the calculations were done. This is all I want to know. How they came to that conclusion, what exactly was the calculation that was done?

    Reply

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