Chap014-Calculation-N - Materials Requirement Planning(MRP Page 650-657 1 Page 655 MRP Development The MRP is based on the product structure tree

Chap014-Calculation-N - Materials Requirement Planning(MRP...

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1 Materials Requirement Planning (MRP) Page 650 -657
2 Page 655 MRP: Development The MRP is based on the product structure tree diagram Requirements are determined level by level, beginning with the end item and working down the tree The timing and quantity of each “parent” becomes the basis for determining the timing and quantity of the children items directly below it. The “children” items then become the “parent” items for the next level, and so on
3 Page 662 MRP Lot Sizing Rules Lot-for-Lot (L4L) ordering The order or run size is set equal to the demand for that period Minimizes investment in inventory It results in variable order quantities A new setup is required for each run Lot-for-Lot (L4L) ordering = Net requirements ~ Planned-order receipts
4 Page 662 MRP Lot Sizing Rules Economic Order Quantity (EOQ) Can lead to minimum costs if usage of item is fairly uniform This may be the case for some lower-level items that are common to different ‘parents’ Less appropriate for ‘lumpy demand’ items because inventory remnants often result
5 Page 662 MRP Lot Sizing Rules Fixed Period Ordering Provides coverage for some predetermined number of periods
6 Page 656 Example MRP
7 Planned-order receipts ; Lot size

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• Spring '12
• CharoenR.
• Management, Harshad number, Net requirements

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