MATERIALS REQUIREMENT PLANNING

MATERIALS REQUIREMENT PLANNING

is the system of planning and scheduling the time phased material requirements for production operations

OBJECTIVES OF MRP ‡Inventory reduction ‡Reduction in production and delivery lead time ‡Realistic commitments ‡Increased efficiency

COMPONENTS OF MRP

‡Master production schedule ‡Bill of materials ‡Inventory status file

MASTER PRODUCTION SCHEDULE ‡Details how many end items will be produced within specified periods of time ‡Some of the quantities in MPS must equal those in aggregate production plan ‡Capacity limitations must be taken into considerations

BILL OF MATERIALS

‡A record of all the components of an item, the parent component relationship and usage quantities ‡Derived from engineering design ‡One component may have more than one parent ‡Defines product structure

INVENTORY STATUS FILE

Retains inventory status of each item in product structure Shows ‡Lot size policy ‡Lead time ‡Safety stock ‡Time phased information

TIME PHASED INFORMATION Includes ‡Gross requirements ‡Scheduled receipts ‡On hand inventory ‡Planned receipts ‡Planned order releases

OUT PUT OF MRP ‡Product explosion ‡Translation of master production schedule and other sources of demand into the requirement of all sub assemblies, components and raw materials needed to produce parent items ‡Action notices ‡Releasing new orders ‡Action buckets

UPDATING OF MRP ‡Pegging

Identification of components affected by disruption in material plans

‡Cycle counting
Periodic physical verification of on hand inventory and updating of MRP records

‡Updating
In case of change in MPS inventory status file or product structure ‡Regenerative method ‡Net change method

LOT SIZE ‡Lot for lot ordering

Order quantity equals net requirements for a given period

‡Economic order quantity ‡Part period method

Order quantity equals net requirements for more than one period