MRP Class

MRP Class - ProductionPlanningandMaterials...

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Production Planning and Materials  Requirements Planning MRP = Materials Requirements Planning
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Planning Hierarchy Approximate Months on Planning Horizon 1 6 12 18 24 Scheduling Aggregate Facilities
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Facilities Decisions  (Schroeder, Operations Management, 2000) How much total capacity is needed? How large should each unit of capacity  be? When is the capacity needed? What type of facilities/capacity are  needed?
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Facilities Decisions  How much capacity Level of Capacity Cushion When to obtain capacity Economies of scale  Diseconomies of scale
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Capacity Cushion” (Schroeder, Operations Management, 2000) Difference between average demand and  actual capacity Capacity decisions determine capacity  cushion Three basic approaches Try not to run out Build to average forecast Maximize utilization
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Timing of Facility Additions  (Schroeder,  Operations Management, 2000) Preempt the competition Wait-and-see strategy Demand Wait and see Capacity cushion
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Economies & Diseconomies of Scale Economies of scale occur when the average unit cost  decreases as the capacity increases Diseconomies of scale occur when the average unit cost  increases as the capacity increases Average Unit Cost Output Rate Economies of Scale Capacity utilization curves Best operating level for each design Diseconomies of Scale Example: 200 bed hospital 500 bed hospital 800 bed hospital
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Aggregate Planning
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Aggregate Planning Definition  (Schroeder,  Operations Management, 2000) Facilities that are considered fixed  (cannot be expanded or reduced) A time horizon of about 12 months Aggregated level of demand  One or few categories of product Change both supply and demand variable A variety of management objectives
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Planning Options  (Schroeder, Operations Management, 2000) Options for influencing demand. Options for influencing supply
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Options for Influencing Demand  (Schroeder, Operations Management, 2000) Pricing Advertising and promotion Backlog or reservation Development of complementary products
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Options for Influencing Supply  (Schroeder,  Operations Management, 2000) Hiring and layoff of employees Using overtime and undertime Using part-time or temporary labor Carrying inventory Subcontracting Making cooperative arrangements
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Basic Strategies  (Schroeder, Operations Management, 2000) “Level” strategy (level work force) “Chase” strategy (chase the demand)
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Aggregate Planning Costs  (Schroeder, Operations Management, 2000) Hiring and firing costs Overtime and undertime costs Inventory-carrying costs Subcontracting costs Part-time labor costs Cost of stockout or back order
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Aggregate Planning Costs -- Level   (Schroeder, Operations Management, 2000,  Table 12.2 )
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MRP Class - ProductionPlanningandMaterials...

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