MRP_Fall08 - MRP MRP Question: how do firms actually...

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MRP MRP
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Question: how do firms actually organize things to turn materials into finished products?
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Master Production Schedule (MPS) Time-phased plan specifying how many and when the firm plans to build each end item Aggregate Plan (Product Groups) MPS (Specific End Items)
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MPS Example – Maine Woods Toy Co. 41 42 43 44 45 46 47 48 49 50 51 52 Tricycle 300 300 300 300 300 300 300 300 250 250 250 250 Wagon 300 300 300 300 250 250 Scooter 300 300 300 300 250 250 Totals 2,000 Week Product 2,400 2,400 October November December Month One possible MPS…
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Products are combinations of parts… Example: Bicycle Handle bars (1) Metal Frame (1) Wheels (2)
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Dependent vs Independent Demand Dependent Demand Demand for a component (raw material, part, sub- assembly) is dependent on the demand for the end-item into which the component goes. demand often occurs in batches Independent Demand Demand for an item is independent of the demand for other items. These demands are typically determined by outside customers and are end-item demands
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Bill of Materials (BOM) Shows all the assemblies, subassemblies, components, and raw materials required to produce an item Shows way a finished product or parent item is put together from individual components Parent item shown at highest level or level zero Parts that go into parent item are called level 1 components and so on Production planners explode BOM for level zero item to determine the number, due dates, and order dates of subcomponents
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MRP_Fall08 - MRP MRP Question: how do firms actually...

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