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MIT2_854F10_mrp - Material Requirements Planning Lecturer...

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Material Requirements Planning Lecturer: Stanley B. Gershwin
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MRP Overview Primary source: Factory Physics by Hopp and Spearman. Basic idea: Once the final due date for a product is known, and the time required for each production step is known, then intermediate due dates and material requirement times can be determined. Original goal: To determine when material for production is required.
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Demand MRP Overview Demand ... from outside the system is independent demand. ... for components or raw material is dependent demand. Before MRP, buyers were not synchronized with producers.
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Planning Algorithm MRP Overview Start at the due date for a finished product (or end item ) ( T k ) . Determine the last operation, the time required for that operation ( t k 1 ) , and the material required for that operation. The material may come from outside, or from earlier operations inside the factory. Subtract the last operation time from the due date to determine when the last operation should start.
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Planning Algorithm MRP Overview T k 1 = T k t k 1 The material required must be present at that time. Continue working backwards. However, since more than one component may be needed at an operation, the planning algorithm must work its way backwards along each branch of a tree the bill of materials .
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Planning Algorithm MRP Overview Time In some MRP systems, time is divided into time buckets days, weeks, or whatever is convenient. In others, time may be chosen as a continuous variable.
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Discussion MRP Overview What assumptions are being made here ... ... about predictability? ... about capacity? How realistic are those assumptions? Is it more flexible to use time buckets or continuous time?
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Jargon MRP Overview Push system: one in which material is loaded based on planning or forecasts, not on current demand. MRP is a push system. Pull system: one in which production occurs in response to the consumption of finished goods inventory by demand. Which is better?
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Level 1 Bill of Materials (BOM) Top level is end item. Level 0 Items are given a low-level code corresponding to the lowest level they appear Level 2 at, for any end item in the factory. The BOM must be maintained as the product mix changes.
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Master Production Schedule Information concerning independent demand. Gross requirements: What must be delivered in the future, and when. On-hand inventory: Finished good already available. Net requirements: (Gross requirements) (On-hand inventory).
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Master Example Production Schedule Netting Week 1 2 3 4 5 6 7 8 Gross requirements 15 20 50 10 30 30 30 30 Projected on-hand 30 15 -5 Net requirements 0 5 50 10 30 30 30 30 15 of the initial 30 units of inventory are used to satisfy Week 1 demand.
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