PERT 06 Material Requirement Planning (MRP)

� Model Persediaan yang tergantung

permintaan

� Master Production Schedule

� Bills of Materials

� Accurate Inventory records

� Purchase Orders Outstanding

� Lead Times for Each Component

Requirements for Effective Use of

Dependent Demand Inventory Models

Effective use of dependent demand

inventory models requires that the

operations manager know the:

– master production schedule

– specifications or bills-of-material

– inventory availability

– purchase orders outstanding

– lead times

Demand Characteristics

11 22 33 44 55

WeekWeek

400 400 –

300 300 –

200 200 –

100 100 –No. of tables

No. of tables

Continuous demandContinuous demand

M T W Th F M T W Th FM T W Th F M T W Th F

400 400 –

300 300 –

200 200 –

100 100 –No. of tables

No. of tables

Discrete demandDiscrete demand

Independent demandIndependent demand

100 tables100 tables

Dependent demandDependent demand

100 x 1 = 100 x 1 = 100 100 tabletopstabletops

100 x 4 = 400 table legs100 x 4 = 400 table legs

� Shows items to be produced

– End item, customer order, module

� Derived from aggregate plan

Master Production Schedule

Master Production Schedule

� Drives MRP process with a schedule of finished products

� Quantities represent production not demand

� Quantities may consist of a combination of customer orders and demand forecasts

� Quantities represent what needs to be produced, not what can be produced

� Quantities represent end items that may or may not be finished products

�Shows items to be produced

– End item, customer order, module

�Derived from aggregate plan

Master Production Schedule

Item/Week Oct 3 Oct 10 Oct 17 Oct 24

Drills 300 200 310 300

Saws 300 450 310 330

Example

Master Production Schedule

PERIODPERIOD

MPS ITEMMPS ITEM 11 22 33 44 55

Pencil CasePencil Case 125125 125125 125125 125125 125125

ClipboardClipboard 8585 9595 120120 100100 100100

LapboardLapboard 7575 120120 4747 2020 1717

LapdeskLapdesk 00 5050 00 5050 00

Inputs to theProduction Plan

Procurement

Supplier

Performance

Aggregate

Production Plan

Marketing

Customer

Demand

Engineering

Design

Completion

Management

Return on

Investment

Capital

Human

Resources

Manpower

Planning

Finance

Cash Flow

ProductionCapacity

Inventory

The Planning Process

Production Plan

Execute MaterialPlans

Master ProductionSchedule

MaterialRequirements

Plan

CapacityRequirements

Plan

Execute CapacityPlans

Realistic??No

Yes

Inventory

Process

stage

Demand

Type

Number

& ValueOther

Raw Material

WIP Finished

Goods

Independent

Dependent

A Items

B Items

C Items

Maintenance

Dependent

Operating

Inventory Classifications

Item Materials WithIndependent Demand

Materials WithDependent Demand

DemandSource

Company Customers Parent Items

MaterialType

Finished Goods WIP & Raw Materials

Method ofEstimatingDemand

Forecast & BookedCustomer Orders

Calculated

PlanningMethod

EOQ & ROP MRP

Dependent versus Independent Demand

Inputs to theProduction Plan

Procurement

Supplier

Performance

Aggregate

Production Plan

Marketing

Customer

Demand

Engineering

Design

Completion

Management

Return on

Investment

Capital

Human

Resources

Manpower

Planning

Finance

Cash Flow

ProductionCapacity

Inventory

The Planning Process

Production Plan

Execute MaterialPlans

Master ProductionSchedule

MaterialRequirements

Plan

CapacityRequirements

Plan

Execute CapacityPlans

Realistic??No

Yes

Typical Focus of the Master Production Schedule

Make to Order

(Process Focus)

Assemble to Order or Forecast

(Repetitive)

Stock to Forecast

(Product Focus)

Schedule finished

product

Steel, Beer, Bread Light bulbs, Paper

Print shopMachine shop

Fine dining restaurant

Examples:

Number of end

items

Number of

inputs

Typical focus of the

master production

schedule Schedule

orders

Schedule

modules

Motorcycles, autos,

TVs, fast-food

restaurant

� List of components & quantities needed

to make product

� 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.

Bill-of-Material

Figure from Example 1

� Modular bills

– Modules are final components used to make

assemble-to-stock end items

� Planning bills

– Used to assign artificial parent

– Reduces number of items scheduled

� Phantom bills

– Used for subassemblies that exist temporarily

Special Bills-of-Material

Bicycle(1)P/N 1000

Handle Bars (1)P/N 1001

Frame Assembly (1)

P/N 1002

Wheels (2)P/N 1003

Frame (1)P/N 1004

Bill-of-MaterialProduct Structure Tree

Time-Phased Product Structure

1 2 3 4 5 6 7 8

D

G2 weeks

1 weekF

E

3 weeks

2 weeks

A1 week

C1 week

B

2 weeks to produce

E

D

Must have D and E

completed here so

production can begin on B

2 weeks

1 week

Start production

of D

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

� Manufacturing computer information

system

� Determines quantity & timing of

dependent demand items

© 1995

Corel

Corp.

Material Requirements Planning (MRP)

� Computer system

� Mainly discrete products

� Accurate bill-of-material

� Accurate inventory status

– 99% inventory accuracy

� Stable lead times

© 1984-1994 T/Maker Co.

MRP Requirements

Material Requirements, Planning (MRP)

� Computerized inventory control and

production planning system

� When to use MRP?

– Dependent demand items

– Discrete demand items

– Complex products

– Job shop production

– Assemble-to-order environments

� 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

customer service

MRP Benefits

Material Requirements Planning

Materialrequirementsplanning

Planned order

releases

Work orders

Purchase orders

Rescheduling notices

Itemmaster file

Productstructure

file

Master production schedule

Structure of the MRP System

MRP by period report

MRP by date report

Planned orders report

Purchase requirements

Exception reports

MRP

Programs

Master Production

ScheduleBOM

Lead Times

(Item Master File)

(Bill-of-Material)

Inventory Data

Purchasing data

Table 14.3

Derivation of Master Schedule

Therefore, these are the gross

requirements for B1040+10

= 50 40 50 2015+30

= 45

1 2 3 4 5 6 7 8Periods

Gross requirements: B

Periods

10 10

1 2 3

Master schedule for S sold directly

40 50 15

A

CB

5 6 7 8 9 10 11

Lead time = 4 for AMaster schedule for A

40 20 30

S

B C

8 9 10 1211 13

Lead time = 6 for SMaster schedule for S

MRP Systems - Input and Output

MasterProductionScheduleBill of

MaterialsMaterial

RequirementsPlanning System

InventoryStatus

Planned Order& OtherReports

Item MasterPurchasingData

Lot-Sizing Techniques

�Lot-for-lot

�Economic Order Quantity

�Part Period Balancing

�Wagner-Whitin Algorithm

Figure from Example 4

Figure from Example 5

Figure from Example 6

Extensions of MRP

�Closed loop MRP

�Capacity planning - load reports

�MRP II - Material Resource Planning

�Enterprise Resource Planning

Figure 14.8: Closed-Loop MR

Extensions of MRPCapacity Planning

� Tactics for smoothing the load and minimizing the impact

of changed lead time include:

– Overlapping - reduces the lead time, entails sending

pieces to the second operation before the entire lot has

completed the first operation

– Operations splitting - sends the lot to two different

machines for the same operation

– Lot splitting - breaking up the order and running part

of it ahead of the schedule