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

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