ChVII-MRP-Sp10

ChVII-MRP-Sp10 - MGMT 36100 Operations Management (OM)...

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Unformatted text preview: MGMT 36100 Operations Management (OM) Material Requirements Planning / Manufacturing Resources Planning (MRP) First half of twentieth century: EOQ models, reorder point, Gantt charts, master production schedules, bill of material, etc. COPICS (by IBM) – 1960s MRP – early 1970s MRP II – late 1970s ERP - mid to late 1980s Ch. Ch. VII: Material Requirements Planning Material MRP‐Sp10 1 MRP-Sp10 2 MGMT 36100 MGMT 36100 In MRP, a finished product is called an end item. Here we have two end items that we want to assemble, labeled X and Y. X Each end item is built using items (components, sub-assemblies). sub-assemblies). Y MRP starts with Master Production Schedule (MPS) Master for all end items. MPS is prepared with inputs from the aggregate plan, confirmed orders from the customers (firm orders) and latest forecasts. Aggregate Aggregate Plan Firm Orders Forecasts Demand for end items is based on customer orders, forecasts, etc. and is considered to be independent. Suppose we want to produce 100 stool of type X. We will need 100 square seats, 400 legs, etc. To build 50 of Y, we will need 50 round seats, 150 legs, etc. The demand for other items is dependent on end item demand. MRP-Sp10 3 Master Production Schedule (MPS) We will start with an example of MPS for two products X and Y. MPS MRP-Sp10 4 MGMT 36100 MGMT 36100 Here is the aggregate plan for 6 months. The numbers are units of standard product X. Standard product: “X” and 1Y = 1.4*X 1 550 2 610 3 530 4 455 5 420 6 510 Wagon assembly Items procured: A, C, D, E. A C D E We will prepare MPS MPS 200 X + 250 Y 400 X + 150 Y for months 1 and 2. 200 + 1.4*250 = 550 400 + 1.4*150 = 610 Make further adjustments to Week 1 2 3 4 5 6 7 8 reflect latest refl X 80 70 0 50 70 90 100 60 information information (confirmed Y 60 40 80 70 52 40 20 10 orders, forecast, etc.) Master Production Schedule (MPS) Each week represents a “time bucket” MRP-Sp10 Process flow diagram E 9 80 28 We will now use “Product Structure Diagram” B Textbook: Product structure tree. Drill C D SubSubassembly G Final assembly A D 9 80 35 5 MRP-Sp10 Week X Y 1 75 60 2 3 4 5 6 40 7 20 8 60 30 X 70 10 60 75 40 70 55 55 MGMT 36100 90 100 6 MGMT 36100 MRP-Sp10 1 Want to build wagons X 1 Wagon (X) : 1 body (A), 2 axles (C), 4 wheels (E) and 22 bolts (D). MRP uses parent-child relationship parentA(1) G(2) D(6) Parent Children X G B Child C(1) B(2) D(8) Later, we will need the reverse relationship: child – parent. MGMT 36100 Product Structure Diagram X . X Assembly Level 0 A G D . A G Sub- assembly 1 A, G, D B, C, D E C Parents X G G G, X B X 7 Procure . B C D D 2 B D Drill A B C D E G . E Procure Procure Procure 3 E End item “X” is drawn at the highest level. Other items are drawn at lower levels, parent level is higher than a child. MRP-Sp10 E(1) MRP-Sp10 Notice item “D” MGMT 36100 8 Example 1: Wagon How How to determine item levels? Level 0 X Example 2 Item A B C D E F G MRP-Sp10 Child Level Item Child A B C D E G X E B, C, D A, G, D Level Final E, G F, G A, B, C B, A, E 01 012 012 012 0 1 23 01 0 1 2 2 2 3 1 0 1 A G 2 B C D D 3 E 0 0 0 0 0 0 0 12 3 1 1 12 3 12 12 10 MRP-Sp10 9 Items Items in the table can be written in any order; it will not change the final level for each item. MGMT 36100 MGMT 36100 Example 2 Item A B C D E F G E, G F, G A, B, C A, E Final 3 1 1 0 3 2 2 Level 0 1 2 3 A A G E E A D B C G E V ST Q A L H1 H2 F B R SW A B CA H1 H2 L Q R SC ST SW V CHILDREN L, H1, H2 A, SW B, CA, R, V A, Q - 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 2 23 23 23 12 1 Notice “G” It must have the same structure at lower levels. SC CA 11 MRP-Sp10 A Example 3 L H1 H2 MRP-Sp10 12 MGMT 36100 MGMT 36100 MRP-Sp10 2 Exploding: We want to make 100 wagons. Each wagon needs 22 bolts (D). On hand: 1000 bolts (D) and hand: 50 axle assemblies (G). (G). How many more bolts do we need? We need to know about multiplicity. 100 * 6 = 0600 100 * 2 * 8 = 1600 -1000 * 1 = - 1000 - 50 * 8 = - 400 Net requirement = 800 When should we buy 800 bolts? We need to know lead times. MRP-Sp10 X Assembly Time phasing: Need 100 wagons. On hand = 1000 (D) and 50(G). When to buy bolts? We need to know lead times. X Assembly 1 1 A 2 G SubSub- assembly Procure 2 Drill B 1 C 8 D 6 D How many? Multiplicity 1 E Procure Procure Procure For 100 of X, we need 200 of G. 1A 2G Net Requirement of G = 200 – 50 = 150. 2 SubSub- assembly 3 We now need 150*8 = 1200 of D. Net requirement of D = 1200 – 1000 = 200. Procure Order 4 weeks in advance. 2B 1C 8 D 6D For For 100 of X, we need 600 of D. Drill 1 4 1 1 Net requirement of D = 600. Order 2 weeks in advance. How many? 1 E Procure Procure Multiplicity 2 Lead time Procure MRP can keep track of exploding and time phasing across multiple products over all periods in the planning horizon. 13 MRP-Sp10 14 MGMT 36100 MGMT 36100 Data requirements: Master Production Schedule (MPS) Week 1 2 3 4 5 6 7 8 9 BOM and Item Master and Item Item A B D C E Child, L Multiplicity C4, D1 C3, E2 C1, E3 Lot Sizing SS OH Scheduled Receipt (SR) 0 20 0 100 50 0 1- 80 70 1- 60 0 360 1-300, 2-300, 3-300 23950 Engineering Changes X Y 75 70 10 60 75 90 100 60 80 60 40 70 55 55 40 20 30 35 Inventory transactions 2 L4L 1 L4L 2 POQ 3 3 FOQ 300 1 L4L Bill of Material (B.O.M.) (B.O.M.) MRP Inventory records / recor Item Item master First we determine item levels item levels. A D 0 1 E2C E B L: lead time SS: Safety stock OH: (expected) On hand Lot sizing 1 2 3 4 5 6 Method Text Class Lot for lot L4L Fixed order quantity. FOQ Period order quantity. POQ Economic order quantity EOQ Least total cost LTC Least unit cost LUC 16 Primary Reports •Planned Order Schedule Secondary Reports: •Exception •Planning C C MRP-Sp10 15 MRP-Sp10 MGMT 36100 MGMT 36100 Example 4 Item Child, L Lot Multiplicity Sizing A C4, D B C3, E2 D C, E3 C E 2 1 2 L4L L4L POQ 3 SS OH 0 0 1- 80 1- 60 C C E2C E SR A D 20 70 0 0 0 1 B Example 4 Child, L Lot SS OH Multi Sizing A C4, D 2 L4L L4L 0 20 0 0 70 0 B C3, E2 1 D C, E3 C E SR 1- 80 1- 60 Level Item 0 0 1 2 2 A B D C E Multi, parents Multi, parents ----A 4A, 4A, 3B, D 2B, 2B, 3D 3 FOQ 300 100 360 1-300, 2-300, First, we will 2convert to childchild3-300 1 L4L 50 950 parent relationship. 2 POQ 3 3 1 FOQ 300 L4L 100 360 1-300, 2- Week 1 2 3 4 5 6 7 8 9 2A 0 30 50 0 90 100 60 0 50 300, 3-300 3B 100 80 60 0 20 50 70 80 100 50 950 0 1 80 0 2 3 4 5 6 7 8 9 Level Item How many, parents 0 0 1 2 2 A B D C E ----A 4A, 4A, 3B, D 2B, 2B, 3D We also need the Master Production Schedule Week Week 1 2 3 4 5 6 7 8 9 A 0 30 50 0 90 100 60 0 50 B 100 80 60 0 20 50 70 80 100 A L=2 L4L SS = 0 GR SR OH PR POR 0 30 50 - 0 90 100 60 0 - 50 - In MRP, we perform calculations for level 0, 1, 2, … etc. MRP-Sp10 17 In MRP, we perform calculations for level 0, 1, 2, … etc. etc. Within a level, we will choose alphabetical order. MRP-Sp10 18 MGMT 36100 MGMT 36100 MRP-Sp10 3 0 A L=2 L4L SS = 0 GR SR OH PR POR 0 1 2 0 30 80 80 50 3 50 0 4 5 67 0 90 100 60 0 00 0 90 100 60 60 50 8 0 0 9 50 0 50 GR(C) = 4 * POR(A) + 3 * POR(B) + POR(D) 0 A B D L=2 POQ 3 SS = 0 A C L=3 FOQ 300 SS = 100 4A, 4A, 3B, D POR POR GR SR OH PR POR GR SR OH PR POR GR for an item comes from the POR of parents 1 2 3 4 5 6 7 8 0 0 90 100 60 0 50 0 70 60 0 20 50 70 80 100 90 100 60 50 0 250 0 160 60 250 0 50 0 0 50 0 9 0 0 90 100 GR 100 80 60 0 20 50 70 80 100 SR 60 L=1 L4L OH OH 70 30 20 20 20 20 20 20 20 20 20 20 20 20 SS = 20 70 60 PR 20 50 70 80 100 POR 20 50 70 80 100 70 60 Gross Requirement (GR) for each end items comes from the Master Production Schedule (MPS) B 0 0 Week A B MRP-Sp10 1 0 100 2 30 80 3 50 60 4 0 0 5 20 6 50 7 60 70 8 0 9 50 19 460 180 360 460 440 210 440 300 300 300 300 360 200 320 260 100 260 350 210 210 210 300 600 300 300 300 300 600 300 300 300 90 100 What if lead-time was 4 for item D? leadMRP-Sp10 20 80 100 MGMT 36100 MGMT 36100 GR(E) = 2 * POR(B) + 3 * POR(D) 0 A B D C E L=1 L4L SS = 50 2B, 2B, 3D POR POR POR POR GR SR OH PR POR 1 2 3 4 5 6 7 8 0 0 90 100 60 0 50 0 70 60 0 20 50 70 80 100 250 0 0 0 50 0 0 0 300 600 300 300 300 0 0 0 890 120 40 250 140 160 200 9 0 0 0 0 Example 5 Item Child, L Lot Sizing Multiplicity X Y G P J F X SS 0 0 0 50 20 0 OH 0 0 150 250 420 520 X Y G P J F 2Y 2X, Y X, G G, J SR 1-60, 2-25 1-30 2-600, 3 -600 1-250 How many, parents P2, J P, G2 J, F F - 2 L4L 1 L4L 2 FOQ 250 1 POQ 3 3 FOQ 600 2 L4L Y 950 60 50 50 50 50 50 50 50 110 40 250 140 160 200 110 40 250 140 160 200 P Level Item 0 1 J F F Any time POR occurs in period zero or in a negative period, an exception report is produced. We need to expedite delivery or revise MPS or take some other action. action. In our calculations, we will ignore this POR and continue. MRP-Sp10 21 P G J F MRP-Sp10 1 2 3 MGMT 36100 22 MGMT 36100 0 X L=2 L4L SS = 0 GR SR OH PR POR GR SR OH PR POR 1 2 3 4 5 60 25 40 50 80 60 25 0 0 00 00 40 50 80 40 50 80 20 90 30 60 30 0 0 60 0 60 6 7 8 9 10 20 90 60 50 100 0 20 60 0 0 90 60 50 100 0 0 50 100 70 0 70 GR(G) = 2 * POR(Y) POR(Y) 0 1 2 3 4 40 50 80 20 60 120 5 90 6 7 8 60 50 100 30 60 9 0 10 0 0 - X Y G L=2 FOQ 250 SS = 0 2Y 2Y POR POR GR SR OH PR POR GR SR OH PR POR 0 80 200 120 0 160 400 240 0 80 70 0 160 140 Y L=1 L4L SS = 0 0 80 200 120 30 0 0 0 0 30 0 30 - 0 80 0 80 0 80 70 150 30 30 120 220 230 170 170 10 120 120 250 500 250 250 250 500 250 250 140 100 240 240 300 150 100 280 70 250 110 530 290 520 520 550 50 300 150 550 350 24 80 200 120 80 200 120 P L=1 POQ 3 SS = 50 2X, 2X, Y 50 50 120 50 350 GR(P) = 2 * POR(X) + POR(Y) MRP-Sp10 23 MRP-Sp10 MGMT 36100 MGMT 36100 MRP-Sp10 4 X Y G P J L=3 FOQ 600 SS = 0 X, G 0 POR POR POR POR GR SR OH 420 PR POR GR SR OH PR POR 1 2 40 50 60 0 250 500 520 0 290 550 600 130 180 3 80 80 250 0 330 600 450 4 5 20 90 200 120 0 0 550 0 20 90 430 340 6 60 30 0 0 60 7 8 9 50 100 0 0 80 70 250 0 0 350 0 0 300 100 - 10 0 0 0 0 - Terminology Textbook Gross Requirements Scheduled receipts Projected available balance Net requirements Planned order receipt Planned order release F L=2 L4L SS = 20 G, G, J - 600 250 500 250 600 20 280 580 480 480 480 600 0 250 20 20 20 0 20 250 250 520 520 20 20 250 600 20 20 250 250 600 Summary •MRP is a means for Class determining the number of same GR parts, components, and materials needed to produce same SR products as per master production schedule. (projected) OH •MRP provides time on hand scheduling information specifying when each of the if Not used in materials, parts, and the table components should be Planned PR ordered or produced. receipt same POR •Driven by dependent demand •MRP is a software system The primary report from MRP gives the item by item schedule MRP-Sp10 25 MRP-Sp10 26 MGMT 36100 MGMT 36100 What is MRP? Planning of production orders and purchase orders for components and material needed to support the master production schedule. Time Fences Frozen Capacity Firm Customer Orders G Independent and Dependent Demand End End item Subassemblies Dependent Demand A X Moderately Firm Flexible Independent Demand End item demand may be uncertain but once the MPS is prepared, demand for dependent items becomes certain. Forecast and available capacity 8 Weeks 15 26 B C D D E Components & raw material MRP-Sp10 27 Frozen: No schedule changes allowed within this window Moderately Firm: Specific changes allowed within product groups as long as parts are available Flexible: Significant variation allowed as long as overall capacity requirements remain at the same levels MRP‐Sp10 28 MGMT 36100 MGMT 36100 MRP-Sp10 5 ...
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