Material Requirements Planning (MRP)

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Material Requirements Planning (MRP)"

Transcription

1 Material Requirements Planning (MRP) Unlike many other approaches and techniques, material requirements planning works which is its best recommendation. Joseph Orlicky, History Begun around 1960 as computerized approach to purchasing and production scheduling. Joseph Orlicky, Oliver Wight, and others. Prior to MRP, production of every part and end item was triggered by the inventory falling below a given level (reorder point). APICS launched MRP Crusade in 1972 to promote MRP. 2 1

2 Key Insight Independent Demand finished products Dependent Demand components It makes no sense to independently forecast dependent demands. 3 Assumptions 1. Known deterministic demands. 2. Fixed, known production leadtimes. 3. In actual practice, lead times are related to the level of WIP. Flow Time = WIP / Throughput Rate (Little s Law) Idea is to back out demand for components by using leadtimes and bills of material. 4 2

3 Capacity Requirements Planning 100 Capacity (Hours or Units) Who in the organization actually does this? 5 MRP Procedure 1. Netting: net requirements against projected inventory --Gross Requirements over time (e.g., weekly buckets) --Scheduled Receipts and current inventory --Net Requirements 2. Lot Sizing: planned order quantities 3. Time Phasing: planned orders backed out by leadtime 4. BOM Explosion: gross requirements for components 6 3

4 Inputs Master Production Schedule (MPS): due dates and quantities for all top level items Due dates assigned to orders into time buckets (week, day, hour, etc.) Bills of Material (BOM): for all parent items Inventory Status: (on hand plus scheduled receipts) for all items Planned Leadtimes: for all items Components of leadtime Move Setup Process time Queue time (80-90% total time) 7 Example - Stool Indented BOM Graphical BOM Stool Base (1) Legs (4) Bolts (2) Seat (1) Bolts (2) Stool Level 0 Base (1) Seat (1) Level 1 Legs (4) Bolts (4) Bolts (2) Level 2 Note: bolts are treated at lowest level in which they occur for MRP calcs. Actually, they might be left off BOM altogether in practice. 8 4

5 Example Item: Stool (Leadtime = 1 week) Week Gross Reqs 120 Sched Receipts Proj Inventory Net Reqs 100 Planned Orders 100 Item: Base (Leadtime = 1 week) Week Gross Reqs 100 Sched Receipts Proj Inventory Net Reqs 100 Planned Orders Example (cont.) BOM explosion Item: Legs (Leadtime = 2 weeks) Week Gross Reqs 400 Sched Receipts 200 Proj Inventory Net Reqs 200 Planned Orders

6 Terminology Level Code: lowest level on any BOM on which part is found Planning Horizon: should be longer than longest cumulative leadtime for any product Time Bucket: units planning horizon is divided into Lot-for-Lot: batch sizes equal demands (other lot sizing techniques, e.g., EOQ or Wagner-Whitin can be used) Pegging: identify gross requirements with next level in BOM (single pegging) or customer order (full pegging) that generated it. Single usually used because full is difficult due to lot-sizing, yield loss, safety stocks, etc. 11 Pegging and Bottom up Planning Table 3.7 MRP Calculations for Part 300 Part Required from B Required from 100 Gross Requirements Scheduled Receipts Adjusted Scheduled Receipts 100 Projected on-hand Net Requirements Planed order receipts Planed order releases On-hand = 40 Scheduled releases = none Lot-for-lot LT = 1 week 12 6

7 Bottom Up Planning Reference Figure 3.7 Assume that the scheduled receipt for week 2 for 100 units is not coming in! Have 50 units of inventory, with requirements of 125. Implications I can fill 50 units of demand from part 100 or 50 units from part B. If I go with part 100, that will allow me to fill some of the demand of part A (100 needed for part A). Can I ship 50 units to the customer now and 50 units later? What if I cover the demand of part B? Correct choice depends on the customers involved. 13 More Terminology Firm Planned Orders (FPO s): planned order that the MRP system does not automatically change when conditions change --- can stabilize system Service Parts: parts used in service and maintenance --- must be included in gross requirements Order Launching: process of releasing orders to shop or vendors --- may include inflation factor to compensate for shrinkage Exception Codes: codes to identify possible data inaccuracy (e.g., dates beyond planning horizon, exceptionally large or small order quantities, invalid part numbers, etc.) or system diagnostics (e.g., orders open past due, component delays, etc.) 14 7

8 Conceptual Changes in Lotsizing Approaches Before, EOQ represented a basic trade-off between inventory costs and setup costs. Goldratt: If I am not at capacity on an operation requiring a setup, the time spent on a setup is a mirage. Make setups occur as frequently as possible (smaller lot sizes) as long as capacity is available Produce only when inventory level reaches zero (Wagner Whitin) is not optimal when capacity is a constraint Authors know of no commercial MRP system that uses WW. 15 Important Questions About Optimal Lot-sizing Setup costs Very difficult to estimate in manufacturing systems -May depend on schedule sequence -True costs depends on capacity situation Assumption of deterministic demand and deterministic production -production schedules are always changing because of dynamic conditions in the factory. Assumption of independent products that do not use common resources. Very seldom will see common resources not used. 16 8

9 Important Questions About Optimal Lot-sizing WW leads us to the conclusion that we should produce either nothing in a period or the demand of an integer number of future periods. -generates a production schedule that is very lumpy. There are reasons for generating a level loaded production schedule, one in which the same amount of products are produced in every time period. 17 Problem Formulation t= A time period, t = 1 to T, where T is the planning horizon. Dt = Demand in time period t (in units). Ct = Unit production costs ($/unit), excluding setup or inventory cost in period t. At = Setup (order) cost to produce (purchase) a lot in period t ($). Ht = Holding costs to carry a unit of inventory from period t to period t+1 ($/unit). e.g., if holding costs consists entirely of interest on money tied up in inventory, where i is the annual interest rate and periods correspond to weeks, then h = I * C t 52 It =Inventory (units) left over at the end of period t. Qt =The lot size (units) in period t; this is the decision variable 18 9

10 Problem Objective Satisfy all demands at minimum cost (production, setup, and holding costs) All the demands must be filled, only the timing of production is open to choice. If the unit production cost does not vary with t, then production cost will be the same regardless of timing and can be dropped from consideration. Look at an example: assume setup costs, production costs, and holding costs are all constant over time. Thus, need only to consider setup costs and holding costs. 19 Lot Sizing in MRP Lot-for-lot chase demand Fixed order quantity method constant lot sizes EOQ using average demand Fixed order period method use constant lot intervals Part period balancing try to make setup/ordering cost equal to holding cost Wagner-Whitin optimal method 20 10

11 Data For An Example Problem Table 2.1 t Dt ct At ht Lot-for-lot Simply produce in period t the net requirements for period t. Minimizes inventory carrying costs and maxim izes total setup costs. It is simple and it is consistent with just in time. Tends to generate a more smooth production schedule. In situations where setup costs are minim al (assembly lines), it is probably the best policy to use

12 Lot Sizing Example t D t LL A = 100 h = D = = Lot-for-Lot: $1000 No carrying cost, ten each 23 Lot Sizing Example (cont.) EOQ: 2AD 2x100x30 Q = = = 77 h 1 Note: EOQ is a special case of fixed order quantity. t Total D t Q t Setup $400 Holding $371 Total $

13 Fixed Order Period From EOQ Calculate EOQ using formula presented earlier. Then Fixed Order Period, P = Q/D Calculating P in this manner has all the limitations noted earlier in Chapter. 25 Fixed Order Period Example--Further Comments Example Period Net Requirements Planned Order Recpts Let P = 3. Skip first period, no demand. Sixty units covers demand for periods 2, 3, and 4. Period 5 is skipped because there is no demand. Sixty units covers demand in periods 6, 7, 8. Fifteen units covers demand in period 9, which is the last period in the planning Horizon

14 Part-Period Balancing Combines the assumptions of WW with the mechanics of the EOQ. One of the assumptions of the EOQ is that it sets the average setup costs equal to the average inventory carrying costs. Part-period. The number of parts in a lot times the number of periods they are carried in inventory. Part-period balancing tries to make the setup costs as close to the carrying costs as possible. 27 Part-Period Balancing Example (Cont.) Period Net Requirements Planned Order Receipts Quantity Period 6 Setup Costs Part-periods Inventory Carrying Costs 25 $150 0 $0 40 $ x 1 = 15 $30 60 $ x 2 = 55 $ $ x 3 = 100 $200 Fixed order quantity method (without modifications) tends to work better than WW when dealing with multi-level production systems with capacity limitations

15 Nervousness Item A (Leadtime = 2 weeks, Order Interval = 5 weeks) Week Gross Reqs Sched Receipts Proj Inventory Net Reqs Planned Orders Component B (Leadtime = 4 weeks, Order Interval = 5 weeks) Week Gross Reqs Sched Receipts 14 Proj Inventory Net Reqs 48 Planned Orders 48 Note: we are using FOP lot-sizing rule. 29 Nervousness Example (cont.) Item A (Leadtime = 2 weeks, Order Interval = 5 weeks) Week Gross Reqs Sched Receipts Proj Inventory Net Reqs Planned Orders 63 Component B (Leadtime = 4 weeks, Order Interval = 5 weeks) Week Gross Reqs 63 Sched Receipts 14 Proj Inventory Net Reqs 47 Planned Orders 47* * Past Due Note: Small reduction in requirements caused large change in orders and made schedule infeasible

16 Reducing Nervousness Reduce Causes of Plan Changes: Stabilize MPS (e.g., frozen zones and time fences) Reduce unplanned demands by incorporating spare parts forecasts into gross requirements Use discipline in following MRP plan for releases Control changes in safety stocks or leadtimes Alter Lot-Sizing Procedures: Fixed order quantities at top level Lot for lot at intermediate levels Fixed order intervals at bottom level Use Firm Planned Orders: Planned orders that do not automatically change when conditions change Managerial action required to change a FPO 31 Handling Change New order in MPS Order completed late Scrap loss Engineering changes in BOM Regenerative MRP: completely re-do MRP calculations starting with MPS and exploding through BOMs. Net Change MRP: store material requirements plan and alter only those parts affected by change (continuously on-line or batched daily). Comparison: Regenerative fixes errors. Net change responds faster to changes (but must be regenerated occasionally for accuracy

17 Rescheduling Top Down Planning: use MRP system with changes (e.g., altered MPS or scheduled receipts) to recompute plan can lead to infeasibilities (exception codes) Orlicky suggested using minimum leadtimes bottom line is that MPS may be infeasible Bottom Up Replanning: use pegging and firm planned orders to guide rescheduling process pegging allows tracing of release to sources in MPS FPO s allow fixing of releases necessary for firm customer orders compressed leadtimes (expediting) are often used to justify using FPO s to override system leadtimes 33 Safety Stocks and Safety Leadtimes Safety Stocks: generate net requirements to ensure min level of inventory at all times used as hedge against quantity uncertainties (e.g., yield loss) Safety Leadtimes: inflate production leadtimes in part record used as hedge against time uncertainty (e.g., delivery delays) 34 17

18 Safety Stock Example Item: Screws (Leadtime = 1 week) Week Gross Reqs Sched Receipts 500 Proj Inventory Net Reqs Planned Orders Note: safety stock level is Safety Stock vs. Safety Leadtime Item: A (Leadtime = 2 weeks, Order Quantity =50) Week Gross Reqs Sched Receipts 50 Proj Inventory Net Reqs 20 Planned Orders 50 Safety Stock = 20 units Week Gross Reqs Sched Receipts 50 Proj Inventory Net Reqs Planned Orders

19 Safety Stock vs. Safety Leadtime (cont.) Safety Leadtime = 1 week Week Gross Reqs Sched Receipts 50 Proj Inventory Net Reqs 20 Planned Orders Manufacturing Resource Planning (MRP II) Sometime called MRP, in contrast with mrp ( little mrp); more recent implementations are called ERP (Enterprise Resource Planning). Extended MRP into: Master Production Scheduling (MPS) Rough Cut Capacity Planning (RCCP) Capacity Requirements Planning (CRP) Production Activity Control (PAC) 38 19

20 MRP II Planning Hierarchy Demand Forecast Resource Planning Rough-cut Capacity Planning Bills of Material Inventory Status Aggregate Production Planning Master Production Scheduling Material Requirements Planning Job Pool Job Release Job Dispatching Capacity Requirements Planning Routing Data 39 Master Production Scheduling (MPS) MPS drives MRP Should be accurate in near term (firm orders) May be inaccurate in long term (forecasts) Software supports forecasting order entry netting against inventory Frequently establishes a frozen zone in MPS 40 20

21 Rough Cut Capacity Planning (RCCP) Quick check on capacity of key resources Use Bill of Resource (BOR) for each item in MPS Generates usage of resources by exploding MPS against BOR (offset by leadtimes) Infeasibilities addressed by altering MPS or adding capacity (e.g., overtime) 41 Capacity Requirements Planning (CRP) Uses routing data (work centers and times) for all items Explodes orders against routing information Generates usage profile of all work centers Identifies overload conditions More detailed than RCCP No provision for fixing problems Leadtimes remain fixed despite queueing 42 21

22 Production Activity Control (PAC) Sometimes called shop floor control Provides routing/standard time information Sets planned start times Can be used for prioritizing/expediting Can perform input-output control (compare planned with actual throughput) Modern term is MES (Manufacturing Execution System), which represents functions between Planning and Control. 43 Conclusions Insight: distinction between independent and dependent demands Advantages: General approach Supports planning hierarchy (MRP II) Problems: Assumptions --- especially infinite capacity Cultural factors --- e.g., data accuracy, training, etc. Focus --- authority delegated to computer 44 22

Material Requirements Planning. Lecturer: Stanley B. Gershwin

Material Requirements Planning. Lecturer: Stanley B. Gershwin Material Requirements Planning Lecturer: Stanley B. Gershwin MRP Overview Primary source: Factory Physics by Hopp and Spearman. Basic idea: Once the final due date for a product is known, and the time

More information

1 Material Requirements Planning (MRP)

1 Material Requirements Planning (MRP) IEOR 4000: Production Management page 1 Professor Guillermo Gallego 1 Material Requirements Planning (MRP) Material Requirements Planning (MRP) is a computer-based production planning and inventory control

More information

Material Requirements Planning. Managing Inventories of Items With Dependent Demand

Material Requirements Planning. Managing Inventories of Items With Dependent Demand Material Requirements Planning Managing Inventories of Items With Dependent Demand 1 Demand Types Dependent Demand: Demand for items that are component parts to be used in the production of finished goods

More information

Production Planning Solution Techniques Part 1 MRP, MRP-II

Production Planning Solution Techniques Part 1 MRP, MRP-II Production Planning Solution Techniques Part 1 MRP, MRP-II Mads Kehlet Jepsen Production Planning Solution Techniques Part 1 MRP, MRP-II p.1/31 Overview Production Planning Solution Techniques Part 1 MRP,

More information

ERP Chap. 7. Material Requirement Planning (MRP)

ERP Chap. 7. Material Requirement Planning (MRP) Material Requirement Planning (MRP) Material Requirement Planning An early attempt to develop an integrated MIS for the order fulfillment process. By combining information on the demand for products purchased

More information

ISE 421 QUANTATIVE PRODUCTION PLANNING

ISE 421 QUANTATIVE PRODUCTION PLANNING ISE 421 QUANTATIVE PRODUCTION PLANNING LECTURE III MRP, MRPII, ERP, APS Dr. Arslan ÖRNEK 2013 2014 Fall Term PRODUCTION PLANNING & SCHEDULING (PP&S) PP&S is one of the most critical activities in a manufacturing

More information

OR topics in MRP-II. Mads Jepsens. OR topics in MRP-II p.1/25

OR topics in MRP-II. Mads Jepsens. OR topics in MRP-II p.1/25 OR topics in MRP-II Mads Jepsens OR topics in MRP-II p.1/25 Overview Why bother? OR topics in MRP-II p.2/25 Why bother? Push and Pull systems Overview OR topics in MRP-II p.2/25 Overview Why bother? Push

More information

Basics of Supply Chain Management (BSCM) Curriculum

Basics of Supply Chain Management (BSCM) Curriculum Basics of Supply Chain Management (BSCM) Curriculum Version 4.0 Session 1 to Supply Chain Management to Manufacturing Role of Manufacturing Global Citizenship Manufacturing Business Model Business Environment

More information

Chapter 7. Production, Capacity and Material Planning

Chapter 7. Production, Capacity and Material Planning Chapter 7 Production, Capacity and Material Planning Production, Capacity and Material Planning Production plan quantities of final product, subassemblies, parts needed at distinct points in time To generate

More information

Universidad del Turabo MANA 705 DL Workshop Eight W8_8_3 Aggregate Planning, Material Requirement Planning, and Capacity Planning

Universidad del Turabo MANA 705 DL Workshop Eight W8_8_3 Aggregate Planning, Material Requirement Planning, and Capacity Planning Aggregate, Material Requirement, and Capacity Topic: Aggregate, Material Requirement, and Capacity Slide 1 Welcome to Workshop Eight presentation: Aggregate planning, material requirement planning, and

More information

MASTER PRODUCTION SCHEDULE

MASTER PRODUCTION SCHEDULE 6 MASTER PRODUCTION SCHEDULE MGT2405, University of Toronto, Denny Hong-Mo Yeh So far, in discussing material requirement planning (MRP), we have assumed that master production schedule (MPS) is ready

More information

CHAPTER 6 AGGREGATE PLANNING AND INVENTORY MANAGEMENT 명지대학교 산업시스템공학부

CHAPTER 6 AGGREGATE PLANNING AND INVENTORY MANAGEMENT 명지대학교 산업시스템공학부 CHAPTER 6 AGGREGATE PLANNING AND INVENTORY MANAGEMENT 명지대학교 산업시스템공학부 Learning Objectives You should be able to: Describe the hierarchical operations planning process in terms of materials planning & capacity

More information

Ch.6 Manufacturing Planning & Control System.

Ch.6 Manufacturing Planning & Control System. Part 1 : System Management. Ch.6 Manufacturing Planning & Control System. Edited by Dr. Seung Hyun Lee (Ph.D., CPL) IEMS Research Center, E-mail : lkangsan@iems.co.kr Manufacturing Planning System. Manufacturing

More information

ERP(Enterprise Resource Planning) & MRP

ERP(Enterprise Resource Planning) & MRP ERP(Enterprise Resource Planning) & MRP Mr.Vijayakumar S 1 Session Objectives At the end of this session the delegate would have understood ERP ERP example SAP MRP and structure MRP1 & MRPII difference

More information

MATERIAL REQUIREMENTS PLANNING

MATERIAL REQUIREMENTS PLANNING MATERIAL REQUIREMENTS PLANNING A basic tool for performing the detailed material planning function in the manufacture of component parts and their assembly into finished items. MRP s Managerial objective

More information

Antti Salonen KPP227 - HT 2015. KPP227 Antti Salonen

Antti Salonen KPP227 - HT 2015. KPP227 Antti Salonen Antti Salonen KPP227 - HT 2015 1 Short-term planning 2 Inventory Control Systems Independent demand Items for which demand is influenced by market conditions and is not related to the inventory decisions

More information

Material Requirements Planning MRP

Material Requirements Planning MRP Material Requirements Planning MRP ENM308 Planning and Control I Spring 2013 Haluk Yapıcıoğlu, PhD Hierarchy of Decisions Forecast of Demand Aggregate Planning Master Schedule Inventory Control Operations

More information

12 MRP and ERP. Dr. Ron Lembke

12 MRP and ERP. Dr. Ron Lembke 12 MRP and ERP Dr. Ron Lembke Historical Perspective MRP II Manufacturing Resource Planning ERP- Enterprise Resource Planning mrp material requirements planning MRP Crusade (1975) Material Requirements

More information

MRP and CRP TRAINING GUIDE

MRP and CRP TRAINING GUIDE MRP and CRP TRAINING GUIDE 70-2862A Database: Train eb2 July 2003 This document contains proprietary information that is protected by copyright. No part of this document may be photocopied, reproduced,

More information

INDEPENDENT STUDY PAILIN UDOMSANTI

INDEPENDENT STUDY PAILIN UDOMSANTI 1 INDEPENDENT STUDY ERP Comparison : Production Planning and Control Module PAILIN UDOMSANTI An Independent Study submitted in Partial Fulfillment of the requirements For the Degree of Master of Engineering

More information

IM 322 Inventory Management

IM 322 Inventory Management IM 322 Inventory Management Chapter 9: Material Requirement Planning -1- Textbook: Donald Waters, Inventory Control and Management, 2 nd ed Chapter Outline Master Scheduling The use of MRP (Material Requirement

More information

PARADIGMS THAT DRIVE COSTS IN MANUFACTURING. The whole purpose of a business enterprise is pretty simple to make a profit by selling

PARADIGMS THAT DRIVE COSTS IN MANUFACTURING. The whole purpose of a business enterprise is pretty simple to make a profit by selling PARADIGMS THAT DRIVE COSTS IN MANUFACTURING The whole purpose of a business enterprise is pretty simple to make a profit by selling products or services to persons who desire those particular goods or

More information

BSCM Sample TEST. CPIM(Certified In Production & Inventory Management) - 1 -

BSCM Sample TEST. CPIM(Certified In Production & Inventory Management) - 1 - BSCM Sample TEST. 1. Which of the following demand fulfillment approaches typically provides the longest delivery time? A) Engineer-to-order. B) Make-to-order. C) Assemble-to-order. D) Make-to-stock. 2.

More information

Dependent vs Independent Demand. The Evolution of MRP II. MRP II:Manufacturing Resource Planning Systems. The Modules In MRP II System

Dependent vs Independent Demand. The Evolution of MRP II. MRP II:Manufacturing Resource Planning Systems. The Modules In MRP II System MRP II:Manufacturing Resource Planning Systems IE 505: Production Planning Control Lecture Notes* Rakesh Nagi University at Buffalo * Adapted in part from Lecture Notes of Dr. George Harhalakis, University

More information

Operations Management

Operations Management 13-1 MRP and ERP Operations Management William J. Stevenson 8 th edition 13-2 MRP and ERP CHAPTER 13 MRP and ERP McGraw-Hill/Irwin Operations Management, Eighth Edition, by William J. Stevenson Copyright

More information

Expert s Guide to Successful MRP Projects. September 2012

Expert s Guide to Successful MRP Projects. September 2012 September 2012 Ziff Davis Research All Rights Reserved 2012 White Paper Executive Summary For most manufacturers, the planning department performs business critical functions. It is responsible for balancing

More information

Visual Planning and Scheduling Systems. A White Paper. Gregory Quinn President Quinn & Associates Inc September 2006 Updated October 2006

Visual Planning and Scheduling Systems. A White Paper. Gregory Quinn President Quinn & Associates Inc September 2006 Updated October 2006 Visual Planning and Scheduling Systems A White Paper By Gregory Quinn President Quinn & Associates Inc September 2006 Updated October 2006 Visual Planning and Visual Scheduling Systems Introduction The

More information

INTRODUCTION. What is Enterprise Resource Planning?

INTRODUCTION. What is Enterprise Resource Planning? 1 INTRODUCTION MGT2405, University of Toronto, Denny Hong-Mo Yeh What is Enterprise Resource Planning? According to the definition given in the APICS Dictionary (American Production and Inventory Control

More information

INVENTORY MANAGEMENT

INVENTORY MANAGEMENT 7 INVENTORY MANAGEMENT MGT2405, University of Toronto, Denny Hong-Mo Yeh Inventory management is the branch of business management that covers the planning and control of the inventory. In the previous

More information

TU-E2020. Capacity Planning and Management, and Production Activity Control

TU-E2020. Capacity Planning and Management, and Production Activity Control TU-E2020 Capacity Planning and Management, and Production Activity Control Copyright Jari Laine 11/23/2015 Copyright Jari Laine 11/23/2015 Different capacity planning options 1 4 7 10 13 16 19 22 25 28

More information

QAD Enterprise Applications Standard & Enterprise Edition. Training Guide MRP/CRP

QAD Enterprise Applications Standard & Enterprise Edition. Training Guide MRP/CRP QAD Enterprise Applications Standard & Enterprise Edition Training Guide MRP/CRP 70-3220A QAD 2011.1 Standard & Enterprise Edition Lab: Enterprise Edition 2011.1 r01 - Training Workspace: 10USA > 10USACO

More information

Table of Contents. Planning the ERP System...1

Table of Contents. Planning the ERP System...1 Table of Contents Planning the ERP System...1 Core Group Basic Training...1 Define Current Business Processes...1 Define Future Business Processes...2 Documenting the ERP Blueprint...2 ERP System Budget

More information

Item Master and Bill of Material

Item Master and Bill of Material 4 Item Master and Bill of Material MGT2405, University of Toronto, Denny Hong Mo Yeh The enterprise resource planning (ERP) system plans and controls all resources in an enterprise. Material requirement

More information

Alessandro Anzalone, Ph.D. Hillsborough Community College, Brandon Campus

Alessandro Anzalone, Ph.D. Hillsborough Community College, Brandon Campus Alessandro Anzalone, Ph.D. Hillsborough Community College, Brandon Campus 1. Introduction 2. Background and Fundamental Concepts 3. Bills of Material 4. The MRP Explosion 5. Other MRP Issues 6. Potential

More information

1 2 3 4 5 Demand 150 170 180 160 160

1 2 3 4 5 Demand 150 170 180 160 160 MGT 3110: Exam 2 Study Guide 1. What is aggregate planning? What is its purpose? 2. What are demand options for aggregate planning? Give examples and discuss the effects of each. 3. Why is there a need

More information

2.4 Capacity Planning

2.4 Capacity Planning 2.4 Capacity Planning Learning Objectives Explain functions & importance of capacity planning State four techniques for capacity planning Explain capacity planning factor and bill of capacity techniques

More information

CHAPTER 2: SYSTEM SETUP

CHAPTER 2: SYSTEM SETUP Chapter 2: System Setup CHAPTER 2: SYSTEM SETUP Training Objectives This chapter demonstrates: Microsoft Business Solutions Navision Manufacturing Setup Inventory Setup, as Related to Manufacturing Page

More information

BILL OF RESOURCES AND PRIORITY-CAPACITY BALANCING

BILL OF RESOURCES AND PRIORITY-CAPACITY BALANCING Bill of Resources and PriorityCapacity Balancing 5 BILL OF RESOURCES AND PRIORITYCAPACITY BALANCING MGT2405, University of Toronto, Denny HongMo Yeh Load and capacity are terms that are often used interchangeably.

More information

MRP and CRP TRAINING GUIDE

MRP and CRP TRAINING GUIDE MRP and CRP TRAINING GUIDE 70-2811A MFG/PRO Version eb Database: Demo March 2001 This document contains proprietary information that is protected by copyright. No part of this document may be photocopied,

More information

Short-term Planning. How to start the right operation at the right shop at the right time? Just in Time (JIT) How to avoid waste?

Short-term Planning. How to start the right operation at the right shop at the right time? Just in Time (JIT) How to avoid waste? Short-term Planning Material Requirements Planning (MRP) How to get the right material in the right quantity at the right time? Manufacturing Resource Planning (MRP2) How to start the right operation at

More information

Inventory: Independent Demand Systems

Inventory: Independent Demand Systems Inventory: Independent Demand Systems Inventory is used in most manufacturing, service, wholesale, and retail activities and because it can enhance profitability and competitiveness. It is widely discussed

More information

1.3 ERP System Evolution

1.3 ERP System Evolution 1.3 ERP System Evolution Learning Objectives State the purpose of enterprise resource planning (ERP) systems List the challenges facing the industry List the development stages of the manufacturing planning

More information

Manufacturing Planning and Control for Supp Chain Management

Manufacturing Planning and Control for Supp Chain Management Manufacturing Planning and Control for Supp Chain Management Sixth Edition F. Robert Jacobs Indiana University William L. Berry The Ohio State University (Emeritus) D. Clay Whybark University of North

More information

GESTION DE LA PRODUCTION ET DES OPERATIONS PICASSO EXERCICE INTEGRE

GESTION DE LA PRODUCTION ET DES OPERATIONS PICASSO EXERCICE INTEGRE ECAP 21 / PROD2100 GESTION DE LA PRODUCTION ET DES OPERATIONS PICASSO EXERCICE INTEGRE 2004-2005 Prof : Pierre Semal : semal@poms.ucl.ac.be Assistants : Eléonore de le Court : delecourt@poms.ucl.ac.be

More information

A New Approach for Finite Capacity Planning in MRP Environment

A New Approach for Finite Capacity Planning in MRP Environment A New Approach for Finite Capacity Planning in MRP Environment Hong-bum Na 1, Hyoung-Gon Lee 1, and Jinwoo Park 1 1 Dept. of Industrial Engeering / Automation & Systems Research Inst. Seoul National University

More information

BEST PRACTICES IN DEMAND AND INVENTORY PLANNING

BEST PRACTICES IN DEMAND AND INVENTORY PLANNING WHITEPAPER BEST PRACTICES IN DEMAND AND INVENTORY PLANNING for Food & Beverage Companies WHITEPAPER BEST PRACTICES IN DEMAND AND INVENTORY PLANNING 2 ABOUT In support of its present and future customers,

More information

Manufacturing Planning. Master Production Schedule. Material Requirements Plan. Work Order/ FPO Maintenance. Soft Bill Maintenance

Manufacturing Planning. Master Production Schedule. Material Requirements Plan. Work Order/ FPO Maintenance. Soft Bill Maintenance PRMS TM Manufacturing Planning SHOP FLOOR CONTROL Work Order/ FPO Maintenance Auto Allocation to Lots Pick Slip Print Master Production Schedule Material Requirements Plan Soft Bill Maintenance Stage Request

More information

SAP APO SNP (Supply Network Planning) Sample training content and overview

SAP APO SNP (Supply Network Planning) Sample training content and overview SAP APO SNP (Supply Network Planning) Sample training content and overview Course Objectives At the completion of this course, you will be able to: Understand the concepts of SNP and supply chain network

More information

Fundamentals of Materials and Operations Management

Fundamentals of Materials and Operations Management Fundamentals of Materials and Operations Management Program Overview Program Overview Introduction Fundamentals of Materials and Operations Management Fundamentals of Materials and Operations Management

More information

APICS acknowledges the Basics of Supply Chain Management Committee for its contributions in the development of this resource.

APICS acknowledges the Basics of Supply Chain Management Committee for its contributions in the development of this resource. APICS acknowledges the Basics of Supply Chain Management Committee for its contributions in the development of this resource. Jim Caruso, CPIM, CSCP (chair) Carol Bulfer, CPIM James F. Cox, Ph.D., CFPIM,

More information

Industrial Engineering Prof. Inderdeep Singh Department of Mechanical and Industrial Engineering Indian Institute of Technology, Roorkee

Industrial Engineering Prof. Inderdeep Singh Department of Mechanical and Industrial Engineering Indian Institute of Technology, Roorkee Industrial Engineering Prof. Inderdeep Singh Department of Mechanical and Industrial Engineering Indian Institute of Technology, Roorkee Module - 04 Lecture - 03 Materials Requirement Planning A very warm

More information

CHAPTER 3: PRODUCTION BILL OF MATERIALS

CHAPTER 3: PRODUCTION BILL OF MATERIALS Chapter 3: Production Bill of Materials CHAPTER 3: PRODUCTION BILL OF MATERIALS Objectives The objectives are: Production Bill of Materials (BOM) Production BOM Advanced Features Production BOM Reports

More information

Manufacturing Planning and Control for Supply Chain Management

Manufacturing Planning and Control for Supply Chain Management Manufacturing Planning and Control for Supply Chain Management APICS/CPIM Certification Edition F. Robert Jacobs Indiana University William L. Berry The Ohio State University (Emeritus) D.ClayWhybark University

More information

Master Scheduling Course

Master Scheduling Course The Oliver Wight Public Course Portfolio Master Scheduling Course Detailed Description Schedule your products to satisfy customers and support changes in demand while maximizing plant and supplier resources.

More information

Master Scheduling Course

Master Scheduling Course The Oliver Wight Public Course Portfolio Master Scheduling Course Detailed Description Schedule your products to satisfy customers and support changes in demand while maximizing plant and supplier resources.

More information

Manufacturing. Manufacturing challenges of today and how. Navision Axapta solves them- In the current explosive economy, many

Manufacturing. Manufacturing challenges of today and how. Navision Axapta solves them- In the current explosive economy, many Manufacturing challenges of today and how Navision Axapta solves them- the solution for change; controlled by you. Manufacturing In the current explosive economy, many manufacturers are struggling to keep

More information

IT-375 using the 6 th Edition PRODUCTION AND INVENTORY CONTROL CHAPTER 1: INTRODUCTION TO MATERIALS MANAGEMENT

IT-375 using the 6 th Edition PRODUCTION AND INVENTORY CONTROL CHAPTER 1: INTRODUCTION TO MATERIALS MANAGEMENT IT-375 using the 6 th Edition PRODUCTION AND INVENTORY CONTROL CHAPTER 1: INTRODUCTION TO MATERIALS MANAGEMENT What is wealth? GDP = production = profits What is the source of wealth? The conversion process

More information

Integrated Supply Chain Management Course

Integrated Supply Chain Management Course The Oliver Wight Public Course Portfolio Integrated Supply Chain Management Course Detailed Description Achieving Class A Supply Chain Performance Inspiring Business Excellence 1 Integrated Supply Chain

More information

CISCM STUDY GUIDE. International Purchasing and Supply Chain Management Institute, 2006 1

CISCM STUDY GUIDE. International Purchasing and Supply Chain Management Institute, 2006 1 CISCM STUDY GUIDE International Purchasing and Supply Chain Management Institute, 2006 1 TABLE OF CONTENTS PART PAGE PART I Materials, Production, Inventory, Logistics, and Supply Chain Management 3 PART

More information

INVENTORY MANAGEMENT. 1. Raw Materials (including component parts) 2. Work-In-Process 3. Maintenance/Repair/Operating Supply (MRO) 4.

INVENTORY MANAGEMENT. 1. Raw Materials (including component parts) 2. Work-In-Process 3. Maintenance/Repair/Operating Supply (MRO) 4. INVENTORY MANAGEMENT Inventory is a stock of materials and products used to facilitate production or to satisfy customer demand. Types of inventory include: 1. Raw Materials (including component parts)

More information

COMPUTERIZED MANUFACTURING PLANNING SYSTEM:

COMPUTERIZED MANUFACTURING PLANNING SYSTEM: UNIT 6: COMPUTERIZED MANUFACTURING PLANNING SYSTEM: Traditional Process Planning: There are variations in the level of detail found in route sheets among different companies & industries. In the one extreme,

More information

Jargon Buster 1. Anticipated Delay Report - Formal notification that a work order or purchase order might miss its due date.

Jargon Buster 1. Anticipated Delay Report - Formal notification that a work order or purchase order might miss its due date. Jargon Buster 1 Jargon Buster Introduction Any group of people will develop shorthand ways of talking about things that they are familiar with. This jargon can be confusing to others at best and positively

More information

Planning Optimization in AX2012

Planning Optimization in AX2012 Planning Optimization in AX2012 Streamline your manufacturing operations with Master Planning and Forecasting Kevin Cosman 11 June 2013 About the Presenter Kevin Cosman, Senior Solutions consultant with

More information

Realizing the Benefits of Finite Capacity Scheduling to Manage Batch Production Systems

Realizing the Benefits of Finite Capacity Scheduling to Manage Batch Production Systems Presented at the WBF North American Conference Baltimore, MD, USA 30 April - 4 May 2007 67 Alexander Drive PO Box 12277 Research Triangle Park, NC 27709 +1.919.314.3970 Fax: +1.919.314.3971 E-mail: info@wbf.org

More information

Datasheet Electronic Kanban Ultriva vs. ERP ekanban Modules By Narayan Laksham

Datasheet Electronic Kanban Ultriva vs. ERP ekanban Modules By Narayan Laksham Datasheet Electronic Kanban Ultriva vs. ERP ekanban Modules By Narayan Laksham Summary: Several ERP vendors offer rudimentary Kanban modules to compliment their MRP systems. However, these Kanban modules

More information

Manufacturing Efficiency Guide

Manufacturing Efficiency Guide Note: To change the product logo for your ow n print manual or PDF, click "Tools > Manual Designer" and modify the print manual template. Contents 3 Table of Contents 1 Introduction 5 2 What Is Manufacturing

More information

BEYOND THE BASICS OF MRP: IS YOUR SYSTEM DRIVING EXCESSIVE ORDER QUANTITITES? Michael D. Ford, CFPIM, CSCP, CQA, CRE Principal, TQM Works Consulting

BEYOND THE BASICS OF MRP: IS YOUR SYSTEM DRIVING EXCESSIVE ORDER QUANTITITES? Michael D. Ford, CFPIM, CSCP, CQA, CRE Principal, TQM Works Consulting BEYOND THE BASICS OF MRP: IS YOUR SYSTEM DRIVING EXCESSIVE ORDER QUANTITITES? Michael D. Ford, CFPIM, CSCP, CQA, CRE Principal, TQM Works Consulting INTRODUCTION MRP (Material Requirements Planning) has

More information

Small Lot Production. Chapter 5

Small Lot Production. Chapter 5 Small Lot Production Chapter 5 1 Lot Size Basics Intuition leads many to believe we should manufacture products in large lots. - Save on setup time - Save on production costs Costs associated with Lots

More information

Master planning in Dynamics AX

Master planning in Dynamics AX 12/10/2015 Master planning in Dynamics AX JACOB RODER SR. SOLUTION CONSULTANT DYNAMIC CONSULTING JACOB.RODER@DYNAMICCONSULTING.COM 1 Agenda Morning Short Intro Master planning basics Master plan settings

More information

Issues in Information Systems Volume 14, Issue 2, pp.353-358, 2013

Issues in Information Systems Volume 14, Issue 2, pp.353-358, 2013 A MODEL FOR SIMULTANEOUS DECISIONS ON MASTER PRODUCTION SCHEDULING, LOT SIZING, AND CAPACITY REQUIREMENTS PLANNING Harish C. Bahl, California State University-Chico, hbahl@csuchico.edu Neelam Bahl, California

More information

Inventory Management. Multi-Items and Multi-Echelon. Chris Caplice ESD.260/15.770/1.260 Logistics Systems Nov 2006

Inventory Management. Multi-Items and Multi-Echelon. Chris Caplice ESD.260/15.770/1.260 Logistics Systems Nov 2006 Inventory Management Multi-Items and Multi-Echelon Chris Caplice ESD.260/15.770/1.260 Logistics Systems Nov 2006 Advanced Topics So far, we have studied single-item single location inventory policies.

More information

CHAPTER 3: PRODUCTION BILL OF MATERIALS

CHAPTER 3: PRODUCTION BILL OF MATERIALS Chapter 3: Production Bill of Materials CHAPTER 3: PRODUCTION BILL OF MATERIALS Objectives Introduction The objectives are: Production Bill of Materials (BOM) Production BOM Advanced Features Production

More information

Consumption-Driven Finite Capacity Inventory Planning and Production Control. A thesis presented to. the faculty of

Consumption-Driven Finite Capacity Inventory Planning and Production Control. A thesis presented to. the faculty of Consumption-Driven Finite Capacity Inventory Planning and Production Control A thesis presented to the faculty of the Russ College of Engineering and Technology of Ohio University In partial fulfillment

More information

Preparing For the Demo

Preparing For the Demo HMS Demo Script Copyright Copyright 2002-2003 Horizons International, Inc. All rights reserved. Information in this document is subject to change without notice. The software described in this document

More information

Agenda. TPPE37 Manufacturing Control. A typical production process. The Planning Hierarchy. Primary material flow

Agenda. TPPE37 Manufacturing Control. A typical production process. The Planning Hierarchy. Primary material flow TPPE37 Manufacturing Control Agenda Lecture 2 Inventory Management 1. Inventory System Defined 2. Inventory Costs 3. Inventory classification 4. Economic order quantity model 5. Newsboy problem 6. Reorder

More information

MANAGEMENT ISSUES-MRP

MANAGEMENT ISSUES-MRP MANAGEMENT ISSUES-MRP MRP is a confusing term because it has two definitions, materials requirements planning and manufacturing resource planning. The first of these is the original meaning, used in the

More information

Exam4Free. Free valid exam questions and answers for certification exam prep

Exam4Free.  Free valid exam questions and answers for certification exam prep Exam4Free http://www.exam4free.com Free valid exam questions and answers for certification exam prep Exam : MB7-224 Title : Navision 4.0 Manufacturing Vendors : Microsoft Version : DEMO NO.1 What is the

More information

Module 5 The R+ Available Stock Calculation

Module 5 The R+ Available Stock Calculation Welcome to Demand Driven Technologies, the home of Replenishment plus and module 5 of our education tutorials Understanding the R+ Available Stock Calculation This module is intended to provide a basic

More information

User Guide QAD Manufacturing

User Guide QAD Manufacturing QAD Enterprise Applications Enterprise Edition User Guide QAD Manufacturing Product Structures Routings and Work Centers Formulas and Processes Co-products and By-products Work Orders Shop Floor Control

More information

Inventory Management. Material Requirements Planning. Chris Caplice ESD.260/15.770/1.260 Logistics Systems Oct 2006

Inventory Management. Material Requirements Planning. Chris Caplice ESD.260/15.770/1.260 Logistics Systems Oct 2006 Inventory Management Material Requirements Planning Chris Caplice ESD.260/15.770/1.260 Logistics Systems Oct 2006 Assumptions: Basic MRP Model Demand Constant vs Variable Known vs Random Continuous vs

More information

EnterpriseOne Requirements Planning 8.9 PeopleBook

EnterpriseOne Requirements Planning 8.9 PeopleBook EnterpriseOne Requirements Planning 8.9 PeopleBook September 2003 EnterpriseOne Requirements Planning 8.9 PeopleBook SKU REL9EMP0309 Copyright 2003 PeopleSoft, Inc. All rights reserved. All material contained

More information

Operations Management Part 12 Purchasing and supplier management PROF. NAKO STEFANOV, DR. HABIL.

Operations Management Part 12 Purchasing and supplier management PROF. NAKO STEFANOV, DR. HABIL. Operations Management Part 12 Purchasing and supplier management PROF. NAKO STEFANOV, DR. HABIL. Introduction basic terms Supply management describes the methods and processes of modern corporate or institutional

More information

Chapter 7 Production Planning

Chapter 7 Production Planning Production Planning and Control Chapter 7 Production Planning Professor JIANG Zhibin Dr GRANG Na Department of Industrial Engineering & Management Shanghai Jiao Tong University Contents Introduction Master

More information

Choosing Planning & Scheduling solutions for Metals

Choosing Planning & Scheduling solutions for Metals Choosing Planning & Scheduling solutions for Metals White Paper The planning and scheduling of metals production presents special problems because of the complexity of the manufacturing process and the

More information

Master Planning The Forgotten, But Vital, Manufacturing Supply Chain Planning Process

Master Planning The Forgotten, But Vital, Manufacturing Supply Chain Planning Process Master Planning The Forgotten, But Vital, Manufacturing Supply Chain Planning Process KEN TITMUSS, CFPIM INTRODUCTION Over the last twelve years the author has presented numerous APICS and SAPICS educational

More information

A DECISION SUPPORT SYSTEM FOR CAPACITY MANAGEMENT. A Senior Project. presented to

A DECISION SUPPORT SYSTEM FOR CAPACITY MANAGEMENT. A Senior Project. presented to A DECISION SUPPORT SYSTEM FOR CAPACITY MANAGEMENT A Senior Project presented to the Faculty of the Industrial and Manufacturing Engineering Department California Polytechnic State University, San Luis

More information

SAP ERP Versus SAP APO: Which Production Planning Functionality Do I Use, and How Can I Be Successful?

SAP ERP Versus SAP APO: Which Production Planning Functionality Do I Use, and How Can I Be Successful? SAP ERP Versus SAP APO: Which Production Planning Functionality Do I Use, and How Can I Be Successful? Matthew Campbell SCMO2 Copyright 2013 Wellesley Information Services, Inc. All rights reserved. What

More information

Strategic Business Analysis

Strategic Business Analysis BACKGROUND The XYZ Corporation is a $50,000,000 per year New England producer of metal cutting equipment for industrial and consumer use. The company was founded in 1957, entrepreneurial led at first and

More information

CHAPTER 2: FORECAST AND MPS

CHAPTER 2: FORECAST AND MPS Chapter 2: Forecast and MPS CHAPTER 2: FORECAST AND MPS Training Objectives In this chapter, you learn about: Production Forecast within Microsoft Business Solutions Navision Manufacturing II Netting Actual

More information

Material Requirement Planning (MRP) Mohd Yusnurahman Bin Mohd Yuznah

Material Requirement Planning (MRP) Mohd Yusnurahman Bin Mohd Yuznah Material Requirement Planning (MRP) Nur'Ain Binti Yahaya Hazwan Bin Ismail Mohd Yusnurahman Bin Mohd Yuznah Nurhazwani Binti Jaya B050810172 B050810289 B050810294 B050810188 What is MRP? a system that

More information

APICS PRINCIPLES OF OPERATIONS MANAGEMENT TOPIC OUTLINE CONCEPTS AND APPLICATIONS

APICS PRINCIPLES OF OPERATIONS MANAGEMENT TOPIC OUTLINE CONCEPTS AND APPLICATIONS APICS PRINCIPLES OF OPERATIONS MANAGEMENT TOPIC OUTLINE CONCEPTS AND APPLICATIONS About this Topic Outline This outline details the concepts and applications coved in all five of the APICS Principles of

More information

Antti Salonen KPP227 - HT 2015 KPP227

Antti Salonen KPP227 - HT 2015 KPP227 - HT 2015 1 Inventory management Inventory management concerns short-range decisions about supplies, inventories, production levels, staffing patterns, schedules and distribution. The decisions are often

More information

MATERIALS MANAGEMENT. Module 9 July 22, 2014

MATERIALS MANAGEMENT. Module 9 July 22, 2014 MATERIALS MANAGEMENT Module 9 July 22, 2014 Inventories and their Management Inventories =? New Car Inventory Sitting in Parking Lots Types of Inventory 1. Materials A. Raw material B. WIP C. Finished

More information

School of Management and Languages Capacity Planning

School of Management and Languages Capacity Planning School of Management and Languages Capacity Planning Dr Neil Towers 1 Learning Objectives a. To understand Capacity Planning and Control b. To manage the supply chain capabilities effectively Dr Neil Towers

More information

How to Configure and Use MRP

How to Configure and Use MRP SAP Business One How-To Guide PUBLIC How to Configure and Use MRP Applicable Release: SAP Business One 8.8 All Countries English October 2009 Table of Contents Purpose... 3 The MRP Process in SAP Business

More information

PRINCIPLES OF INVENTORY AND MATERIALS MANAGEMENT

PRINCIPLES OF INVENTORY AND MATERIALS MANAGEMENT PRINCIPLES OF INVENTORY AND MATERIALS MANAGEMENT Fourth Edition Richard J. Tersine The University of Oklahoma TEGHNISCHE HOCHSCHULE DARMSTADT Fochbereich 1 Gesonr> 11-. ib I iothek Betiier >wi rtschottsiehre

More information

Virtual Pull Systems. Don Guild, Synchronous Management INTRODUCTION

Virtual Pull Systems. Don Guild, Synchronous Management INTRODUCTION INTRODUCTION Have you implemented kanban yet? Have you been unable to roll it out or just abandoned it? Most companies who begin kanban implementation struggle to finish the job. In too many cases, the

More information

abf Avercast Business Forecasting The Trusted Name in Demand Management. Software Features: Enterprise Level Software Solutions for: The Cloud

abf Avercast Business Forecasting The Trusted Name in Demand Management. Software Features: Enterprise Level Software Solutions for: The Cloud Avercast Business Forecasting Avercast Business Forecasting (ABF) is powered by an industry leading 187 forecasting algorithms. ABF systematically measures each algorithm against up to five years of historical

More information

MED NITC MANUFACTURING REQUIREMENTS PLANNING (MNMRP) SOFTWARE PACKAGE

MED NITC MANUFACTURING REQUIREMENTS PLANNING (MNMRP) SOFTWARE PACKAGE MED NITC MANUFACTURING REQUIREMENTS PLANNING (MNMRP) SOFTWARE PACKAGE A tool for material planning and scheduling of components and subassemblies of assembled products A tool useful for MSME Dr. V. Madhusudanan

More information

CHAPTER 3: PRODUCTION BILL OF MATERIALS

CHAPTER 3: PRODUCTION BILL OF MATERIALS Chapter 3: Production Bill of Materials CHAPTER 3: PRODUCTION BILL OF MATERIALS Training Objectives In this chapter, you should learn about: Production Bill of Materials (BOM) Production BOM Advanced Features

More information