IM 322 Inventory Management

Transcription

1 IM 322 Inventory Management Chapter 9: Material Requirement Planning -1- Textbook: Donald Waters, Inventory Control and Management, 2 nd ed

2 Chapter Outline Master Scheduling The use of MRP (Material Requirement Planning) Extension of the basic ERP method Introduction to ERP 2

3 Resource Planning for Manufacturing Resource Planning for Manufacturing Determine when specific products will be made when specific customer orders will be filled, and what products / capabilities are still available to meet new demand Calculate timing and quantities of material orders needed to support the master schedule 3 Adapted from: Roberta Russell & Bernard W. Taylor, II, Operations ManagementI

4 Material Requirement Planning (MRP) Computerized inventory control & production planning system Schedules component items when they are needed - no earlier and no later Key Outputs of MRP 4

5 When to use MRP Dependent and discrete items Complex products Job shop production Assemble-to-order environments Dependent / Independent Demand? Clipboard Top clip (1) Bottom clip (1) Pivot (1) Spring (1) 5 Finished clipboard Pressboard (1) Rivets (2)

6 Demand Characteristics Demand Characteristics for Finished Products and Their Components Independent demand Dependent demand 100 x 1 = 100 tabletops 100 tables 100 x 4 = 400 table legs No. of tables Continuous demand No. of tables Discrete demand Week M T W Th F M T W Th F

7 7 MRP Input & Output

8 Major Inputs to MRP Process: 1. Bill of Material Product structure file Determines which component items need to be scheduled Product Structure Record Clipboard Clipboard Level 0 Top clip (1) Bottom clip (1) Pivot (1) Spring (1) Pressboa rd (1) Clip Assembly (1) Rivet s (2) Level 1 Finished clipboard Pressboard (1) Rivets (2) Top Clip (1) Bottom Clip (1) Piv ot (1) Sprin g (1) Level 2 8

9 Major Inputs to MRP Process: 2. Master Production Schedule (MPS) Drives MRP process with a schedule of finished products Quantities represent production not demand Quantities may consist of a combination of customer orders & demand forecasts Quantities represent what needs to be produced, not what can be produced Example 9 PERIOD MPS ITEM Clipboard Lapdesk Lapboard Pencil Case

10 Major Inputs to MRP Process: 2. Master Production Schedule (MPS) 10

11 MPS example On-hand inventory at end of week 36: 2,000 Backpack Month September Octobrt Week Forecasted demand 1,500 1,500 1,500 1,400 1,400 1,250 1,250 1,250 Booked demand 1,422 1,505 1,471 1, Projected ending inventory Master Production Schedule 4,500 4,000 3,700 Available-to-promise (ATP) 11

12 Major Inputs to MRP Process: 3. Inventory Record Inventory file Contains an extensive amount of information on every item that is produced, ordered, or inventoried in the system Includes on-hand quantities, lot sizes, safety stock, lead time, and etc. DESCRIPTION INVENTORY POLICY Item Pressboard Lead time 1 Item no. 734 Annual demand 5000 Item type Purch Holding cost 1 Product/sales class Comp Ordering/setup cost 50 Value class B Safety stock 0 Buyer/planner RSR Reorder point 39 Vendor/drawing EOQ 316 Phantom code N Minimum order qty 100 Unit price/cost 1.25 Maximum order qty 500 Pegging Y Multiple order qty LLC 1 Policy code 3 12

13 MRP Processes 4 Basic steps 13

14 Lot Sizing Rules / Batching Order 14

15 Lot Sizing Rule / Batching Order Comparison 15

16 MRP Matrix Gross Requirement Derived from planned order releases of the parent Actual / estimated demand, in case of final product Schedule Receipts Items on order Scheduled to arrive in the future time period Projected on hand Current inventory, or anticipated inventory at the end of period Projected on-hand Inventory at end of period t Inventory onhand at end of = period t -1 + Scheduled / planned receipts in period t - Gross requirements in period t 16

17 MRP Matrix Net requirements Actual quantity to produce based on projected on hand and on-order quantity Planned Order Receipts Quantity, when orders need to be received Consider lot sizing rule: Planned Order Release When order need to be placed to receive on time Consider lead time 17

18 Example MRP MRP Matrix Matrix ITEM: CLIPBOARD LLC: 0 PERIOD LOT SIZE: L4L LT: Gross Requirements Scheduled Receipts 175 Projected on Hand 25 Net Requirements Planned Order Receipts Planned Order Releases 18

19 MRP Matrices

20 MRP Example 2 A(2) X B(1) Item On-Hand Lead Time (Weeks) X 50 2 A 75 3 B 25 1 C 10 2 D 20 2 C(3) C(2) D(5) Requirements include units (80 (80 firm firm orders and and forecast) of of X in in week

21 Testing Lot Sizing Rules X A(2) C(3) C(2) B(1) D(5) 21 Day: X Gross requirements 95 LT=2 Scheduled receipts Proj. avail. balance On- Net requirements 45 hand Planned order receipt Planner order release 45 A Gross requirements 90 LT=3 Scheduled receipts Proj. avail. balance On- Net requirements 15 hand Planned order receipt Planner order release 15 B Gross requirements 45 LT=1 Scheduled receipts Proj. avail. balance On- Net requirements 20 hand Planned order receipt Planner order release 20 C Gross requirements LT=2 Scheduled receipts Proj. avail. balance On- Net requirements hand Planned order receipt Planner order release D Gross requirements 100 LT=2 Scheduled receipts Proj. avail. balance On- Net requirements 80 hand Planned order receipt Planner order release 80

22 Testing Lot Sizing Rules Given that lead time = 3 periods, safety stock = 20 units Inventory carrying cost = $5 / unit-period Reordering cost = $150 order Gross Requirements Scheduled Receipts Projected on Hand 60 Net Requirements Planned Order Receipts Determine the most appropriate lot sizing rule (a) Lot-for-Lot (b) FOQ = 50 units (c) POQ = 3 periods (d) Use EOQ (e) Use POQ = Q / average d Planned Order Releases 22

23 Benefits of MRP MRP can generate many different kinds of report, including: Timetable of operations Timetable of orders Changes in previous orders Performance reports Planning reports Records of inventory transactions 23