Material Requirements Planning
(MRP)
Inventory Classifications
Inventory
Process Number & Demand
Other
stage Value Type
Raw Material A Items
Independent Maintenance
WIP B Items
Dependent Operating
Finished Goods C Items
Dependent versus
Independent Demand
Materials With Materials With
Item
Independent Demand Dependent Demand
Demand
Company Customers Parent Items
Source
Material
Finished Goods WIP & Raw Materials
Type
Method of Forecast &
Estimating Forecast
Customer Orders
Demand
Planning
EOQ & ROP MRP
Method
Collins Industries
Largest manufacturer of ambulances in the
world
12 major ambulance designs
18,000 different inventory items
6,000 manufactured parts
12,000 purchased parts
Using Material Requirement Planning (MRP)
MRP and The Production Planning
Process
Aggregate
Forecast & Production Resource
Firm Orders Planning Availability
Material Master
Requirements Production
Planning Scheduling
No, modify CRP, MRP, or MPS
Detail Capacity Shop
Requirements Realistic? Floor
Planning Yes Schedules
Inputs to the
Production Plan
Marketing
Production Customer Finance
Capacity Demand Cash Flow
Inventory
Aggregate Human
Procurement
Production Plan Resources
Supplier
Manpower
Performance
Planning
Management Engineering
Return on Design
Investment Completion
Capital
The Planning Process
Aggregate production plan
Change
production plan?
Master production
schedule
Change master
Change requirements? production schedule?
Material requirements plan
Change capacity?
Detail capacity plan
Is capacity Is
Realistic plan being execution
No meeting
Yes met?
the plan?
Execute capacity plans
Execute material plans
Aggregate Production Plan
Months January February
Aggregate Production Plan
(shows the total quantity of
1,500 1,200
amplifiers
Weeks 1 2 3 4 5 6 7 8
Master Production Schedule
(Shows the specific type
and quantity of amplifier to
be produced
240 watt amplifier 100 100 100 100
150 watt amplifier 500 500 450 450
75 watt amplifier 300 100
Requirements for Effective Use of
Dependent Demand Inventory Models
master production schedule
specifications or bills-of-material
inventory availability
purchase orders outstanding
lead times
Structure of the MRP System
Master Production
BOM
Schedule
MRP by Period Report
MRP by date report
Lead Times Planned order report
(Item Master File)
Purchase advice
Exception report
Inventory Data Exception report
MRP planning
programs
(computer and
software)
Purchasing data
Bill-of-Material
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
Product Structure Tree
Bicycle(1)
P/N 1000
Handle Bars (1) Frame Assembly (1)
P/N 1001 P/N 1002
Wheels (2) Frame (1)
P/N 1003 P/N 1004
Product Structure for “Awesome” A
Time-Phased Product Structure
Must have D and E completed
here so production can begin
Start production of on B
D 1 week
D 2 weeks to
produce
2 weeks B
E
A
2 weeks
E 1 week
2 weeks 1 week
G 3 weeks C
1 week F
D
1 2 3 4 5 6 7 8
Gross Material Requirements Plan for 50
“Awesome A” Speaker Kits
MRP Requirements
Computer system
Mainly discrete products
Accurate bill-of-material
Accurate inventory status
99% inventory accuracy
Stable lead times
© 1984-1994 T/Maker Co.
Lot-Sizing Techniques
Lot-for-lot
Economic Order Quantity
MRP Lot-Sizing Problem: Lot-for-Lot
Techniques
MRP Lot-Sizing Problem: EOQ Technique
MRP and JIT
MRP - a planning and scheduling technique with
fixed lead times
JIT - a way to move material expeditiously
Integrating the two:
Extensions of MRP
Closed loop MRP rencana produksi, capacity planning-load
reports, mengintegrasikan dan menyeimbangkan jadwal dan
aktivitas antar job shop dan keseluruhan proses produksi, feedback
jadwal produksi induk
MRP II - Material Resource Planning ditambahkan dg jam
kerja, jml SDM, biaya bahan, biaya modal, (enterprise application
integration - EAI, dll)
Enterprise Resource Planning (ERP) MRP II with ties to
customers and suppliers (business application programming
interface - BAPI, SCM, CRM)
MRP and ERP Information Flows,
Integrated with Other Systems
MRP in Services
Can be used when demand for service or service
items is directly related to or derived from demand
for other services
restaurant - rolls required for each meal
hospitals - implements for surgery
etc.
