Material Requirements Planning
&
Distribution Requirements Planning
( MRP & DRP )
MRP - 1
Supply Chain Revisited
Manufacturer
(Campbell’s )
Customer
(Park’n Shop
DC, Stores)
Consumers
Customer places an
order

what happens in a supply chain?
MRP - 2
Chain Reaction
Customer order
Campbell’s Soup
Issuing orders +
producing (1 wk)
Can
Chicken
Order to farms
(1 wk )
...
Orders to Metal
Processor
Order to Steel Maker
...
Chicken raising (30 wks)
...
Hatching eggs(4 wks)
MRP - 3
Waiting hens to lay eggs ( 3 mos)
Material Requirements
Planning (MRP)

Mfg. computer information system

Determines quantity & timing of
dependent demand items
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available
4
5
25
15
33
8
30
23
33
Net Requirements
7
Planned Order Receipts
7
Planned Order Releases
MRP - 4
25
3
7
MRP Requirements

Computer system

Mainly discrete products

Accurate bill-of-material

Accurate inventory status


99% inventory accuracy
Stable lead times
MRP - 5
MRP & Production
Planning Process
Forecast &
Firm Orders
APP
Material
Requirements
Planning
Master
Production
Scheduling
Resource
Availability
How many and When for FG?
MRP - 6
MRP System
Input & Output
What items
make up
the product
How long to
make items
What to make
& when
Material
Requirements
Planning Sys.
What items to
make & when
MRP - 7
What is in
stock
What is on
order
MRP System
Input & Output
Bill of
Materials
Master
Production
Schedule
Material
Requirements
Planning Sys.
Item Master
Planned Order
& Other
Reports
MRP - 8
Inventory
Status
Purchasing
Data
Master
Production Schedule
MRP - 9
Master
Production Schedule

Shows items to be produced
End item, customer order, module


Derived from aggregate plan

Example
Item/Week Oct 3 Oct 10 Oct 17 Oct 24
Product A1
300
200
310
300
Product X3
300
450
310
330
MRP - 10
Bill-of-Material
MRP - 11
Bill-of-Material

List of components & quantities
needed to make product

Provides product structure (tree)



Parents: Items above given level
Children: Items below given level
Shows low-level coding

MRP - 12
Top level is 0; next level is 1 etc.
Bill-of-Material
Product Structure Tree
Bicycle(1)
P/N 1000
Handle Bars (1)
P/N 1001
Frame Assy (1)
P/N 1002
Wheels (2)
P/N 1003
MRP - 13
Frame (1)
P/N 1004
Bill of Material
Example
Bill of Material
P/N: 1000
Name: Bicycle
P/N
Desc
Qty
1001
Handle Bars
1
1002
Frame Assy
1
1003
Wheels
2
1004
Frame
1
MRP - 14
Units Level
Each
1
Each
1
Each
2
Each
2
DVD Players
A CM/OED
MRP - 15
About 10
pages
MRP - 16
Product Structure
Thinking Challenge
The demand for product A is 50. How many
of each component is needed to satisfy
demand?
A
B(2)
C(3)
E(3)
D(2)
MRP - 17
E(1)
F(2)
G(1)
D(2)
Product Structure
Solution*
A
50
50 x 2 = 100
50 x 3 = 150
B(2)
C(3)
E(3)
D(2)
100 x 2 =
200
MRP - 18
100 x 3 =
300
E(1)
150 x 2 =
300
F(2)
150 x 1 =
150
G(1)
Note:
D: 200 + 600 = 800
E: 300 + 150 = 450
300 x 1 =
300
D(2)
300 x 2 =
600
Item Master
MRP - 19
Lead Time
Input
MRP - 20
Wait
Time
Move
Time
Queue Setup Run
Time
Time Time
Output
Lead Times &
Product Structure
Handle Bars
2 wk.
Lead time
1 wk.
Frame
2 wk.
1 wk. Bicycle
3 wk.
Frame
Assy
Wheels
1
2
3
4
5
6
7
8
Time (weeks)
MRP - 21
Li Fung Trading 香港利丰贸易行
Inside fabrics： Taiwan
Cover 外套：
S. Korea
Staffing
Materials：
China
Label 标签，
Deco. 装饰，
Strings 带子，
Buttons纽扣
等等： HK
Zips拉链：
Japan
Assembly：China
MRP - 22
Made-in-HK？ Shipped thru HK => USA,EC
MRP Output
MRP - 23
MRP Report
(Week #, beg. of Nov.)
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
23
3
4
5
25
15
8
0
30
3
33
Net Requirements
7
Planned Order Receipts
7
Planned Order Releases
MRP - 24
7
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Report
Gross Requirements
Scheduled Receipts
Available Inventory
Net Requirements
1
2
2
20
3
4
5
25
15
5
30
Total
quantity
required
23
3
33
8
0
20
by all parents
7
Planned Order Receipts
Planned Order Releases
MRP - 25
7
7
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Report
1
2
Gross Requirements
2
20
Scheduled Receipts
5
3
4
5
25
15
30
Available Inventory
23 3 &33
8
0
20 Quantity
estimated
Net Requirements
completion date of 7
Planned Order Receipts in-process orders
7
Planned Order Releases
MRP - 26
7
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Report
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
23
3
4
5
25
15
8
0
30
3
33
Net Requirements
Actual & projected 7
Planned Order Receipts inventory available for
7
use (excludes safety
Planned Order Releases
7
stock )
MRP - 27
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Report
1
2
3
4
Gross Requirements
2 20
25
‘Gross
Scheduled Receipts
Requirements’
less
5
30
‘Available’
Available Inventory 20
23 3 inventory
33 8
5
15
0
Net Requirements
7
Planned Order Receipts
7
Planned Order Releases
MRP - 28
7
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Report
1
Gross Requirements
Scheduled Receipts
Available Inventory
20
Net Requirements
2
3
4
2 20
25
Quantity
&
5
30due
date of orders
23 3 33 8
should be
received
Planned Order Receipts
Planned Order Releases
MRP - 29
5
15
0
7
7
7
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Report
Gross Requirements
Scheduled Receipts
Available Inventory
20
Net Requirements
1
2
2
20
3
4
5
25
15
5
30
Quantity &
23
3 start
33 8
planned
date of orders
Planned Order Receipts
Planned Order Releases
MRP - 30
0
7
7
7
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.


Someone once asked me if there was any real
difference between engineers, scientists, and
managers in today's high tech companies.
Although the differences are often subtle to an
outsider, you can tell one from another simply
by the questions they ask.



MRP - 31
Engineering: "How will this work?"
Science: "Why will this work?"
Management: "When will this work?"
MRP Program Logic
Computing Gross Requirements
MRP - 32
MRP Example
Component B
A master schedule calls for
starting (planned order
release) 2 units of product X
in week 1, 20 in week 2, & 10
in week 4. The planned
order releases for product Y
are 15 in week 4, and 15 in
week 5. Determine the
gross requirements for
component B.
MRP - 33
X
A(1)
B(1)
Y
A(1)
C(3)
Component B Solution
Y
X
A(1)
B(1)
Planned Order Releases X
Week 1 2 3 4 5
10
Qty 2 20
A(1)
Planned Order Releases Y
Week 1 2 3 4 5
15 15
Qty
10
Qty 2 20
Week 1 2 3 4 5
Gross Requirements B
MRP - 34
C(3)
Thinking Challenge
Component C
A master schedule calls for
starting (planned order
release) 2 units of product X
in week 1, 20 in week 2, & 10
in week 4. The planned
order releases for product Y
are 15 in week 4, and 15 in
week 5. Determine the
gross requirements for
component C.
MRP - 35
X
A(1)
B(1)
Y
A(1)
C(3)
Component C Solution*
Y
X
A(1)
B(1)
Planned Order Releases X
Week 1 2 3 4 5
10
Qty 2 20
A(1)
Planned Order Releases Y
Week 1 2 3 4 5
15 15
Qty
45 45
Qty
Week 1 2 3 4 5
Gross Requirements C
MRP - 36
C(3)
Thinking Challenge
Component A
A master schedule calls for
starting (planned order
release) 2 units of product X
in week 1, 20 in week 2, & 10
in week 4. The planned
order releases for product Y
are 15 in week 4, and 15 in
week 5. Determine the
gross requirements for
component A.
MRP - 37
X
A(1)
B(1)
Y
A(1)
C(3)
Component A Solution*
Y
X
A(1)
B(1)
Planned Order Releases X
Week 1 2 3 4 5
10
Qty 2 20
A(1)
Planned Order Releases Y
Week 1 2 3 4 5
15 15
Qty
25 15
Qty 2 20
Week 1 2 3 4 5
Gross Requirements A
MRP - 38
C(3)
MRP Program Logic
Computing Planned Orders
MRP - 39
MRP Example
Prepare a net requirements plan:
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
3
4
5
25
15
30
20
Net Requirements
Planned Order Receipts
Planned Order Releases
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP - 40
MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
3
4
5
25
15
30
20
Net Requirements
Planned Order Receipts
Planned Order Releases
MRP - 41
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Formulas

Available Inv. = On-hand
- Safety stock -Allocated



On-hand is inventory physically present
Allocated is inventory reserved for
special orders
On-hand = Prior period's on-hand
+ Scheduled receipts
Net requirement = Gross requirement
Available
MRP - 42

MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
3
4
5
25
15
30
23
Net Requirements
23 = (20 ‘Available’) + (5 ‘Scheduled
Planned Receipts’
Order Receipts
to be completed in week 1)
Planned Order Releases
- (2 ‘Requirement for 2 in week 1’).
MRP - 43
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
23
3
4
5
25
15
30
3
Net Requirements
3 = (23 ‘Available Inv.’) - ( 20
Planned Order Receipts
‘Gross requirements’ in week
Planned Order Releases
2)
MRP - 44
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
23
3
4
5
25
15
30
3
33
Net Requirements
Planned Order
33 Receipts
= (3 ‘Available Inv.’) + (30
‘Scheduled
Planned Order
Releases Receipts’ to be
completed in week 3)
MRP - 45
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
23
3
4
5
25
15
30
3
33
8
Net Requirements
Planned Order Receipts
8 = (33 ‘Available Inv.’) -
(25 Gross Requirements in
Planned Order Releases
week 4).
MRP - 46
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
23
3
4
5
25
15
8
0
30
3
33
Net Requirements
All 8 units Available Inv. are
Planned Order Receipts
used up to satisfy the 15
Planned Order Releases
units gross requirements in
Lead time = 3; lotweek
policy5.= lot-for-lot (LFL);
MRP - 47
on-hand = 20 units; safety stock = 0 units.
MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
20
23
3
4
5
25
15
8
0
30
3
33
Net Requirements
Planned Order Receipts
15 required but only 8
Planned Order
Releases ‘Net Requirement’
‘Available’.
is 15
- 8lot=policy
7.
Lead time
= 3;
= lot-for-lot (LFL);
MRP - 48
on-hand = 20 units; safety stock = 0 units.
7
MRP Solution
1
2
Gross Requirements
2
20
Scheduled Receipts
5
3
4
5
25
15
8
0
30
Available
Inventory
7 must
be completed
5
3 33
20 23 in week
(i.e., received into inventory).
Net Requirements
7
Planned Order Receipts
7
Planned Order Releases
MRP - 49
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP Solution
Gross Requirements
1
2
2
20
Scheduled Receipts
5
An order of 7 must be
Available Inventory 20 23
started in week 2.
Net Requirements
Lead time is 3 weeks.
3
4
5
25
15
8
0
30
3
33
7
Planned Order Receipts
Planned Order Releases
MRP - 50
7
7
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 0 units.
MRP
Problem 2
A master schedule calls for
50 units of F in week 6, & 60
in week 8. On-hand levels
are F = 0, G = 20, & H = 60.
Another 20 units of G are
scheduled to be received in
week 4. Order quantities
are lot-for-lot except for H,
which has a lot size of 50 or
multiples of 50.
MRP - 51
F(1)
LT = 2
G(1)
LT = 1
H(4)
LT = 2
H(1)
LT = 2
Product F
Solution*
1
Gross Req.
Net Requirements
Planned Ord. Rec.
Planned Ord. Rel.
MRP - 52
3
4
5
6
50
Scheduled Rec.
Available Inv.
2
0
7
8
60
Product F
Solution*
1
2
3
4
5
Gross Req.
6
7
50
8
60
Scheduled Rec.
Available Inv.
0
0
0
0
0
0
0
0
0
Net Requirements
50
60
Planned Ord. Rec.
50
60
Planned Ord. Rel.
MRP - 53
50
60
Component G Solution*
1
2
3
4
Gross Req.
Scheduled Rec.
Available Inv.
20
20
Net Requirements
Planned Ord. Rec.
Planned Ord. Rel.
MRP - 54
5
6
7
8
Component G Solution*
1
2
3
4
Gross Req.
50
Scheduled Rec.
20
Available Inv.
20
Net Requirements
Planned Ord. Rec.
Planned Ord. Rel.
MRP - 55
5
6
60
7
8
Component G Solution*
1
2
3
4
Gross Req.
50
Scheduled Rec.
20
Available Inv.
5
6
0
Net Requirements
10
60
Planned Ord. Rec.
10
60
MRP - 56
10
8
0
0
60
20 20 20 20 0 0
Planned Ord. Rel.
7
60
Component H Solution*
1
Gross Req.
Scheduled Rec.
Available Inv.
60
Net Requirements
Planned Ord. Rec.
Planned Ord. Rel.
MRP - 57
2
3
4
5
6
7
8
Component H Solution*
Parent F
1
2
3
Planned Ord. Rel.
Parent G
Gross Req.
MRP - 58
5
50
1
2
Planned Ord. Rel.
Component H
4
3
4
10
1
2
3
6
7
8
6
7
8
6
7
8
60
5
60
4
5
40 50 240 60
Component H Solution*
1
2
3
4
(G) (F)
Scheduled Rec.
60
Net Requirements
Planned Ord. Rec.
Planned Ord. Rel.
MRP - 59
6
40 50 240 60
Gross Req.
Available Inv.
5
(G) (F)
7
8
Component H Solution*
1
Gross Req.
2
3
4
5
6
7
8
40 50 240 60
(G) (F) (G) (F)
Scheduled Rec.
Available Inv.
60 60 60 20 20 30 20 20 20
Net Requirements
30 220 30
Planned Ord. Rec.
Planned Ord. Rel.
MRP - 60
50 250 50
50 250 50
Summary of MRP

Some important terms





MRP - 61
Bill of materials
Leadtimes
Master production schedule (MPS: over a
planning horizon)
Inventory status
Scheduled deliveries
Summary of MRP
An “Explosion”
Part A1
…….
Part A6
Component A
Part B1
Component B
Product XX
MRP - 62
Part B2
MRP II

MRP II is the extension of MRP to include
other resources such as labour hrs, costs,
m/c capacities, and other information, not
just material quantity

MRP is the core part of MRP II

Additional inputs to MRPII: standard hrs,
process “routes”, cost inform. , etc.

MRP II can be used to perform short term cap.
Planning and cost evaluation
MRP - 63
Application: a Distribution
Network
Central DC
Region A DC
DC A1
…….
DC A10
“Implosion”
MRP - 64
Region B DC
DC B1
DC Bx
A Distribution Network
Central DC
LTa
LTb
Region A DC
LTa1
Region B DC
LTa10
LTbx
LTb1
DC A1
MRP - 65
…….
DC A10
DC B1
DC Bx
Local DC Demand Forecasts
WK
5
6
7
8
9
10
DC a1
10
12
0
20
30
15
DC a2
5
15
5
10
20
10
20
12
15
20
25
30
.
.
.
DC bx
MRP - 66
Translating into Regional DC

Lead-time information
WK
5
6
7
8
9
10
DC a1
10
12
0
20
30
15
DC a2
5
15
5
10
20
10
Should be available no later than 5 - LTa1
MRP - 67
Distribution Resource
Planning (DRP)
Central DC
LTa
LTb
Region A DC
LTa1
Region B DC
LTa10
LTbx
LTb1
DC A1
MRP - 68
…….
DC A10
DC B1
An “implosion”
DC Bx
Backorder(s)
or on-hand
inventory at
t=0; +: onhand, --:
shortage
Forecast =
gross req.
In Transit=
scheduled
receipt
Los Angeles
On-hand Balance
Safety stock
Lead time (wk)
Lot-size
Vitamin C Tablets 100/bottles
500
200
2
300
End-of-the-period
inventory (on-hand)
Note that here safety stock is not deducted from on-hand!
Past due
1
2
3
Forecast
100
120
90
In transit
Projected on-hand
500
400
280
490
Plnd Shpmts-Rcpt.Date
300
Plnd Shpmts-Ship.Date
300
MRP - 69
Beginning-of-theperiod order
4
110
5
120
6
100
7
80
8
120
380
260
460
300
380
260
300
Montreal
On-hand Balance
Safety stock
Lead time (wk)
Lot-size
160
75
2
150
Past due
Forecast
In transit
Projected on-hand
Plnd Shpmts-Rcpt.Date
Plnd Shpmts-Ship.Date
MRP - 70
160
1
40
120
2
50
150
220
3
45
4
50
5
40
6
45
7
40
8
50
175
125
85
190
150
150
100
150
New York Store
On-hand Balance
Safety stock
Lead time (wk)
Lot-size
300
100
2
300
Past due
Forecast
In transit
Projected on-hand
Plnd Shpmts-Rcpt.Date
Plnd Shpmts-Ship.Date
MRP - 71
300
300
1
120
2
130
3
115
4
125
5
140
6
110
7
125
8
105
180
350
300
235
110
270
300
300
160
335
300
230
300
Summary at Central Distribution Center (Factory)
Past due
LA
Montreal
NY
Vancouver
Toronto
Chicago
TOTALS
MRP - 72
1
300
2
300
3
4
300
150
300
Week
5
6
7
8
300
300
0
0
300
150
300
300
150
150
300
750
450
300
DRP Before and After Changes in Demand
Los Angeles
On-hand Balance
Safety stock
Lead time (wk)
Lot-size
Vitamin C Tablets 100/bottles
500
200
2
300
Past due
Forecast
In transit
Projected on-hand
Plnd Shpmts-Rcpt.Date
Plnd Shpmts-Ship.Date
500
Before
1
2
100
120
400
280
3
90
4
110
5
120
6
100
7
80
8
120
490
300
380
260
460
300
380
260
4
110
5
120
6
100
7
80
8
120
310
490
300
390
310
490
300
300
300
After
Past due
Forecast
In transit
Projected on-hand
Plnd Shpmts-Rcpt.Date
Plnd Shpmts-Ship.Date
MRP - 73
330
2
120
210
3
90
300
420
300
300
MRP & DRP
P#1
LT1
P#2
Model1
LT2
Prod Plan
CDC
Only a few firms can do so!
MRP - 74
MRP: what, when,
how much to
make or order
DRP: what, when
& how much
needed at CDC
End

No beyond this slide
MRP - 75
MRP Program Logic
Safety Stock
MRP - 76
Using Safety Stock
1
2
Gross Requirements
2
20
Scheduled Receipts
5
Available Inventory
18
21
3
4
5
25
15
6
6
30
1
31
Net Requirements
2 units Safety stock decreases
Planned‘Available’
Order Receipts
inventory to 18. The
physically on-hand
Plannedamount
Order Releases
9 is still
the same (20).
MRP - 77
Lead time = 3; lot policy = lot-for-lot (LFL);
on-hand = 20 units; safety stock = 2 units.
9
9
MRP Program Logic
Lot Sizing
MRP - 78
Lot Size

Lot: Batch of material that moves &
gets processed together

Reduces setup & handling time & cost

Techniques



MRP - 79
Lot-for-lot (LFL)
Economic order quantity (EOQ)
Part period balancing
Lot Size Effects
1
2
3
Lot size is 5 or multiples
(5, 10,
Gross Requirements
2 20
15 etc.). The quantities started
Scheduled Receipts
5
30
(i.e., released) & completed are
Available
Inventory 20 23
3 33
increased.
4
5
25
15
8
0
Net Requirements
7
Planned Order Receipts
Planned Order Releases
10
10
Lead Time = 3; Lot Size= 5 units (or Multiples);
On-Hand = 20 Units; Safety Stock = 0 Units.
MRP - 80
MRP Thinking Challenges
MRP - 81
MRP
Thinking Challenge 1
A master schedule calls
for 200 units of product
A in period 5. No stock
of any components is
on-hand or on order. All
order sizes are lot-for-lot.
Determine the amount &
timing of all planned
order releases.
MRP - 82
A(1)
LT = 1
B(2)
LT = 2
C(4)
LT = 3
Product A
Solution*
1
2
3
4
Gross Requirements
5
200
Scheduled Receipts
Available Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases
MRP - 83
0
0
0
0
0
0
Product A
Solution*
1
2
3
4
Gross Requirements
5
200
Scheduled Receipts
Available Inventory
0
0
0
0
0
0
Net Requirements
200
Planned Order Receipts
200
Planned Order Releases
MRP - 84
200
Component B Solution*
1
Gross Requirements
Scheduled Receipts
Available Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases
MRP - 85
0
2
3
4
5
Component B Solution*
(2 B’s per A)(200 A’s)
Gross Requirements
1
2
3
4
5
400
Scheduled Receipts
Available Inventory
Net Requirements
0
A’s are released in week 4
Planned Order Receipts
so B’s are due then.
Planned Order Releases
MRP - 86
Component B Solution*
1
2
3
Gross Requirements
4
5
400
Scheduled Receipts
Available Inventory
0
0
0
0
0
Net Requirements
400
Planned Order Receipts
400
Planned Order Releases
MRP - 87
400
Lead time is 2 weeks.
Component B Solution*
1
2
3
Gross Requirements
4
5
400
Scheduled Receipts
Available Inventory
0
0
0
0
0
Net Requirements
400
Planned Order Receipts
400
Planned Order Releases
MRP - 88
400
0
Component C Solution*
1
Gross Requirements
Scheduled Receipts
Available Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases
MRP - 89
0
2
3
4
5
Component C Solution*
(4 C’s per A)(200 A’s)
Gross Requirements
Net Requirements
Planned Order Receipts
Planned Order Releases
MRP - 90
2
3
4
800
Scheduled Receipts
Available Inventory
1
0
5
Component C Solution*
1
2
3
Gross Requirements
4
5
800
Scheduled Receipts
Available Inventory
0
0
0
0
0
Net Requirements
800
Planned Order Receipts
800
Planned Order Releases
MRP - 91
800
Lead time is 3 weeks.
Component C Solution*
1
2
3
Gross Requirements
4
5
800
Scheduled Receipts
Available Inventory
0
0
0
0
0
Net Requirements
800
Planned Order Receipts
800
Planned Order Releases 800
MRP - 92
0
Other Applications and MRP
Extension

Restaurant - Read pp 359-360 of
Render’s book

ERP - enterprise resource planning
systems


MRP - 93
MRP: a tool for production
ERP: “under which the entire firm
operates from the same data”
Relationships of Aggregate
Schedule
Forecast &
Firm Orders
Material
Requirements
Planning
Aggregate
Production
Planning
Resource
Availability
Work force
Inventory
Subcontractors
Master
Production
Scheduling
No, modify CRP, MRP, or MPS
Capacity
Requirements
Planning
MRP - 94
Realistic?
Yes
MRP II
Shop
Floor
Schedules
ERP
Forecast &
Firm Orders
Material
Requirements
Planning
+ DRP + …...
Aggregate
Production
Planning
Resource
Availability
Work force
Inventory
Subcontractors
Master
Production
Scheduling
No, modify CRP, MRP, or MPS
Capacity
Requirements
Planning
MRP - 95
Realistic?
Yes
MRP II
Shop
Floor
Schedules