In an environment in which substantial variation of

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Unformatted text preview: an environment in which substantial variation of sales are anticipated (and can be forecasted accurately), MRP has a substantial advantage. forecasted Main Advantage of JIT over MRP: JIT reduces inventories to Main JIT a minimum. In addition to saving direct inventory carrying costs, there are substantial side benefits, such as improvement in quality and plant efficiency. improvement 2 MRP At the heart of the production plan are the forecast of demand for the end items produced over the planning horizon. (the products shipped out the door) horizon. The MRP system starts with the MPS or Master Production Schedule. This is the forecast for the sales of the end item over the planning horizon. The MPS is broken down into a detailed schedule of production for each of the components that compromise an end item. an Schematic Schematic of the Productive System Productive 3 MPS The data sources for determining the MPS include: Firm customer orders Firm Forecasts of future demand by item Forecasts Safety stock requirements Safety Seasonal variations Seasonal Internal orders from other parts of the organization Internal The The Three Major Control Phases of the Productive System Phases 4 The Explosion Calculus The explosion calculus is a set of rules for converting the master production schedule to a requirements schedule for all subassemblies, components, and raw materials necessary to produce the end item. necessary There are two basic operations comprising the explosion calculus: • Time phasing. Requirements for lower level items Time must be shifted backwards by the lead time required to produce the items to • Multiplication. A mul...
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