Business Essay

1873 words - 8 pages

Displaying MRP Data
The objective of MRP is to ensure that the correct quantities of component parts are available at the proper time to produce finished products according to the master production schedule. This section describes how that is done for items that appear immediately below the finished product in the product structure tree diagram.
The information obtained from bills of materials, inventory records, and the master schedule can be shown together in the diagram of Figure 9.15, which is the table commonly used to calculate and display MRP information.
Figure 9.15: Table for MRP

The table in Figure 9.15 illustrates time periods across the top. These represent time periods for ...view middle of the document...

An entry in net requirements indicates that a replenishment order will need to be placed. Thus, the last two rows show planned receipts and planned order releases. The planned receipts row shows when orders must arrive in order to avoid a shortage of necessary parts or materials, as indicated by the net requirements row. The planned order releases row indicates the time periods in which those orders must be released (or placed) to arrive at the correct time. The difference between scheduled receipts and planned receipts is that scheduled receipts correspond to orders that have actually been placed sometime in the past, but not yet received. Planned receipts correspond to orders planned for release, but not yet released. Both scheduled receipts and planned receipts are included as units available in the MRP record.
MRP Logic
The information in Figure 9.15 may be completed for each part of raw material as follows:
1. Obtain the bill of materials for the appropriate end product.
2. Begin with a level 1 item from the bill of materials.
3. Multiply the number of units of the level 1 item needed per unit of finished product (from the bill of materials) by the master schedule quantity for each time bucket. Insert this as gross requirements for the appropriate time bucket. Ordinarily, the master schedule indicates the number of units of finished product to be produced in each time period, so the appropriate time bucket will be that same time period. In some cases, however, the master schedule indicates completion of production. If so, the time period when production begins is the appropriate time bucket for gross requirements.
4. Enter any scheduled receipts of the item, based on lead time and orders previously released, in the appropriate time buckets.
5. Determine how many units should be in inventory at the start of the first time bucket. Enter this number in the square to the left of the first time bucket.
6. Perform the following steps for each time bucket, beginning with the first, until the end of the planning horizon is reached. Add projected ending inventory from the preceding time bucket to scheduled receipts for the present period. If this total equals or exceeds gross requirements for the present period, go to step a. If not, go to step b.
1. If gross requirements in the time bucket being planned are less than or equal to the sum of projected ending inventory from the preceding time bucket and scheduled receipts for the current time bucket, enter the difference as projected ending inventory in the current period. Leave net requirement blank, and repeat this step for the next time bucket.
2. If gross requirements are greater than the sum of projected ending inventory from the preceding time bucket and scheduled receipts for the current time bucket, enter the difference as net requirements. Leave projected ending inventory blank for the present time period until the following sub-steps have been...

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