15_posting_-_MRP_1 - Material Requirements Planning (MRP) 1...

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10/25/2011 1 Material Requirements Planning (MRP) 1 “Organizing is what you do before you do something, so that when you do it, it is not all mixed up.” A. A. Milne
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10/25/2011 2 So far we’ve looked at demand forecasting… and inventory management… Question: how do firms actually organize things to turn materials into finished products?
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10/25/2011 3 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
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10/25/2011 4 Master Production Schedule (MPS) Time-phased plan specifying how many and when the firm plans to build each end item Aggregate Plan (Product Groups) Aggregate Plan (Product Groups) MPS (Specific End Items)
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10/25/2011 5 MPS Detailed schedule and sequence Production scheduling algorithms for sequence Tracks orders sold and projected inventories to adjust schedule as needed Projected inventories are calculated based on either demand forecast or booked orders, whichever is greater Assumes sales people will sell! “Available to Promise” is scheduled production not yet sold (important for sales people – why?) Only calculated for dates when production is scheduled = Difference between scheduled production and booked orders until next scheduled production Projected on-hand inventory is not included as it could be sold in preceding weeks
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10/25/2011 6 MPS Example – Maine Woods Toy Co. Month Demand Forecast ST Production OT Production Start Inventory End Inventory Oct 2,900 2,000 400 500 Nov 2,400 2,000 400 Dec 2,000 2,000 0 Excerpted from the aggregate plan… Demand forecast is 50% tricycles, 25% wagons, 25% scooters
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10/25/2011 7 MPS Example – Maine Woods Toy Co. 41
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15_posting_-_MRP_1 - Material Requirements Planning (MRP) 1...

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