1. MRP (Material Requirements Planning) is a production plan for assembling components to build a product. MRP is necessary when a product is composed of many components.
2. What do you need to know to make a good plan?
Dependent demand: Demands for items in inventory that are subassemblies or component parts to be used in the production of finished goods
Independent demand: Demand for items that are finished
3. Dependent demand is certain.
Once the independent demand is set, the schedule for the dependent demand can be determined.
MRP: Computer-based information system for ordering and scheduling of dependent demand inventories.
4. MRP Inputs:
• Master Production Schedule (MPS)
Detailed production plan for a specific model in a product group
• Specifications of components or Bill of Materials (BOM)
Product structure information, showing exactly what components are needed to produce a finished product and how they are assembled together
• Inventory Records and Purchase Orders Outstanding
Available on-hand inventory and on-order inventory for each item in the BOM
• Lead Times
A list of information about lead times for all components necessary to build a final product.
5. MRP Output:
•Gross requirements: Total expected demand for an item or raw material in a time period.
•Scheduled receipts: Open orders scheduled to arrive from vendors or elsewhere in the pipeline.
•Projected on hand: Expected amount of inventory that will be on hand at the beginning of each time period.
•Net requirements: The actual amount needed in each time period.
•Planned-order receipts: Quantity expected to be received by the beginning of the period in which it is shown.
•Planned-order releases: Planned amount to order in each time period; planned-order receipts offset by lead time.
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