9. MRP (Material Requirements Pl

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.