MRP

EXAMPLES
 Dependant Demand
Dependent demand: Demand for items that are subassemblies or
component parts to be used in production of finished goods.

Indep. Demand

Dep. Demand
“Lumpy” demand
Stable demand

Time Time
Amount on hand

Safety stock Amount on hand

Time Time
MRP Inputs MRP Processing MRP Outputs

Changes
Order releases
Master
schedule Planned-order
schedules
Primary
reports Exception reports
Bill of Planning reports
materials MRP computer Secondary
Performance-
programs reports control
reports

Inventory
records Inventory
transaction
Building a CD Cabinet With MRP

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A Product Structure Tree

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 MRP Inputs - Authorized MPS
• From the authorized MPS, we calculate when we need to have
replenishment orders of CD cabinets; when we need a new
MPS order.
Table 14-1 Initial MPS Record for CD Cabinet
Item: CD Cabinet
Lot size rule: FOQ=100
Lead time: 1 week
1 2 3 4 5 6 7 8 9 10 11 12
Gross Requirements: 25 25 25 25 30 30 30 30 35 35 35 35
Projected Available: 80 55 30 5 -20
MPS

Table 14-2 Updated MPS Record for CD Cabinet

Item: CD Cabinet
Lot size rule: FOQ=100
Lead time: 1 week
1 2 3 4 5 6 7 8 9 10 11 12
Gross Requirements: 25 25 25 25 30 30 30 30 35 35 35 35
Projected Available: 80 55 30 5 80 50 20 90 60 25 90 55 20
MPS 100 100 100
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 MRP Inputs-Inventory Records
• System checks the inventory record for each BOM item to see if
inventory is available or if a replenishment order is needed to build
the cabinets.
Table 14-3 First Inventory Record for CD Cabinet
Item: CD Cabinet
Lot size rule: L4L
Lead time: 1 week
1 2 3 4 5 6 7 8 9 10 11 12
Gross Requirements: 0 0 0 100 0 0 100 0 0 100 0 0
Scheduled Receipts:
Projected Available: 0 0 0 0 -100
Planned Orders

Table 14-4 Updated Inventory Record for CD Cabinet

Item: CD Cabinet
Lot size rule: L4L
Lead time: 1 week
1 2 3 4 5 6 7 8 9 10 11 12
Gross Requirements: 0 0 0 100 0 0 100 0 0 100 0 0
Scheduled Receipts:
Projected Available: 0 0 0 0 0 0 0 0 0 0 0 0 0
Planned Orders 100 100 100
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Inputs-Bills of Material
 The MRP Explosion Process
Table 14-6 Updated Inventory Record for CD Cabinet
Item: CD Cabinet Parent: none
Lot size rule: L4L Children: Top, bottom, door, left side, right side, shelves, shelf supports
Lead time: 1 week
1 2 3 4 5 6 7 8 9 10 11 12
Gross Requirements: 0 0 0 100 0 0 100 0 0 100 0 0
Scheduled Receipts:
Projected Available: 0 0 0 0 0 0 0 0 0 0 0 0 0
Planned Orders: 100 100 100

Using this table and the product structure tree, we will work through an
example of how the MRP explosion process calculates the requirements for
building a CD cabinet. Next we start with the cabinet top to show how MRP
calculates the gross requirements for this component.
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Inventory Records - Components
• It was noted on the previous slide that the parent item (CD Cabinet) has
planned orders in periods 3, 6, and 9.
• Its children (top, bottom, door, left & right side, shelves, and supports) have
gross requirements in periods 3, 6, and 9.

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Inventory Records - Components

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