OM5-1
MRP & ERP
Chapter 15
MRP and ERP
OM5-2
MRP & ERP
MRP
• Material requirements planning (MRP):
Computer-based information system for
ordering and scheduling of dependent
demand inventories
OM5-3
MRP & ERP
Dependant Demand
• Dependent demand: Demand for items
that are subassemblies or component
parts to be used in production of
finished goods.
OM5-4
MRP & ERP
Stable demand
Demand
Demand
Dependent vs Independent Demand
Time
Amount on hand
Amount on hand
Time
“Lumpy” demand
Safety stock
Time
Time
OM5-5
MRP & ERP
MRP Inputs
MRP Processing
MRP Outputs
Changes
Order releases
Master
schedule
Planned-order
schedules
Primary
reports
Bill of
materials
Inventory
records
MRP computer
programs
Exception reports
Planning reports
Secondary
reports
Performancecontrol
reports
Inventory
transaction
OM5-6
MRP & ERP
MPR Inputs
• Master Production Schedule
• Time-phased plan specifying timing
and quantity of production for each
end item.
• Material Requirement Planning
Process
OM5-7
MRP & ERP
Master Schedule
Master schedule: One of three primary
inputs in MRP; states which end
items are to be produced, when these
are needed, and in what quantities.
Cumulative lead time: The sum of the
lead times that sequential phases of
a process require, from ordering of
parts or raw materials to completion
of final assembly.
OM5-8
MRP & ERP
Planning Horizon
Figure 14-4
Assembly
Subassembly
Fabrication
Procurement
1
2
3
4
5
6
7
8
9
10
OM5-9
MRP & ERP
Bill-of-Materials
Bill of materials: One of the three primary
inputs of MRP; a listing of all of the raw
materials, parts, subassemblies, and
assemblies needed to produce one unit of
a product.
Product structure tree: Visual depiction
of the requirements in a bill of materials,
where all components are listed by levels.
OM5-10
MRP & ERP
Product Structure Tree
Figure 15-5
Level
0
1
Chair
Leg
Assembly
2 Legs (2)
3
Cross
bar
Seat
Back
Assembly
Side Cross
Back
Rails (2) bar Supports (3)
OM5-11
MRP & ERP
MRP Processing
• Gross requirements
• Schedule receipts
• Projected on hand
• Net requirements
• Planned-order receipts
• Planned-order releases
OM5-12
MRP & ERP
Typical MRP Matrix
Week
Gross Requirements
Scheduled Receipts
Available On Hand
Net Requirements
Planned Order Receipts
Planned Order Release
1
2
3
4
5
6
7
8
OM5-13
MRP & ERP
MRP Outputs
• Planned orders - schedule indicating
the amount and timing of future orders.
• Order releases - Authorization for the
execution of planned orders.
• Changes - revisions of due dates or
order quantities, or cancellations of
orders.
OM5-14
MRP & ERP
MRP Secondary Reports
• Performance-control reports
• Planning reports
• Exception reports
OM5-15
MRP & ERP
Other Considerations
• Safety Stock
• Lot sizing
– Lot-for-lot ordering
– Economic order quantity
– Fixed-period ordering
– Part-period model
OM5-16
MRP & ERP
MRP Planning
Develop a tentative
master production
schedule
Use MRP to
simulate material
requirements
Convert material
requirements to
resource requirements
Revise tentative
master production
schedule
No
Is shop
capacity
adequate?
Yes
Firm up a portion
of the MPS
No
Can
capacity be
changed to meet
requirements
Yes
Change
capacity
OM5-17
MRP & ERP
MRP in Services
• Food catering service
– End item => catered food
– Dependent demand => ingredients for
each recipe, i.e. bill of materials
• Hotel renovation
– Activities and materials “exploded” into
component parts
OM5-18
MRP & ERP
Benefits of MRP
• Low levels of in-process inventories
• Ability to track material requirements
• Ability to evaluate capacity requirements
• Means of allocating production time
OM5-19
MRP & ERP
Requirements of MRP
• Computer and necessary software
• Accurate and up-to-date
– Master schedules
– Bills of materials
– Inventory records
• Integrity of data
OM5-20
MRP & ERP
MRP: Problem 1
• Suppose you are to produce 100 units of
product A in period 8 with the product
structure shown below. If no stock is on
hand or on order, determine when to release
orders for each component and the size of
each order. Product A with a lead time of 4
periods is made from components B and C
with lead times of 3 and 2 periods,
respectively; C is made from components D
and E with a lead time of 1 period each.
OM5-21
MRP & ERP
MRP: Problem 1
• Product Structure
A
B (1)
C (2)
D (1)
E (2)
OM5-22
MRP & ERP
MRP: Problem 1 - Solution
Master Production Schedule (MPS)
Week
Demand
1
2
3
4
5
6
7
8
100
OM5-23
MRP & ERP
MRP: Problem 1 - Solution (cont.)
• The following can be calculated in this
problem since there is zero available-on-hand
for item A and all of its components.
– End Item A Requirements: 100
– Component B Requirements: 100
– Component C Requirements: 200
– Component D Requirements: 200
– Component E Requirements: 400
OM5-24
MRP & ERP
MRP: Problem 1 – Solution (cont.)
Lead Item
Time
4
1 2 3 4 5 6 7 8
Gross
A Requirements
Planned Order
Release
1
0
0
1
0
0
OM5-25
MRP & ERP
MRP: Problem 1 – Solution (cont.)
Lead Item
Time
3
1 2 3 4 5 6 7 8
Gross
B Requirements
Planned Order
Release
1
0
0
1
0
0
OM5-26
MRP & ERP
MRP: Problem 1 – Solution (cont.)
Lead Item
Time
2
1 2 3 4 5 6 7 8
Gross
C Requirements
Planned Order
Release
2
0
0
2
0
0
OM5-27
MRP & ERP
MRP: Problem 1 – Solution (cont.)
Lead Item
Time
1
1 2 3 4 5 6 7 8
Gross
D Requirements
Planned Order
Release
2
0
0
2
0
0
OM5-28
MRP & ERP
MRP: Problem 1 – Solution (cont.)
Lead Item
Time
1
1 2 3 4 5 6 7 8
Gross
E Requirements
Planned Order
Release
4
0
0
4
0
0
OM5-29
MRP & ERP
MRP: Problem 2
• In the MRP table below, indicate the
available on hand requirements, the planned
order receipts, and the planned order releases.
The lead-time is two periods. Available on
hand are 20 units. Consider a) the lot size is
the same as the net requirements {Lot-ForLot (LFL) or lot size = 1} and b) lot size
equals 15.
OM5-30
MRP & ERP
MRP: Problem 2
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e ip ts
A v a ila b le O n H a n d
N e t R e q u ire m e n ts
P la n n e d O rd e r R e c e ip ts
P la n n e d O rd e r R e le a se
20
OM5-31
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
N e t R e q u ire m e n ts
P la n n e d O r d e r R e c e i p t s
P la n n e d O r d e r R e l e a s e
20
15
OM5-32
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
N e t R e q u ire m e n ts
P la n n e d O r d e r R e c e i p t s
P la n n e d O r d e r R e l e a s e
20
15 25
OM5-33
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
N e t R e q u ire m e n ts
P la n n e d O r d e r R e c e i p t s
P la n n e d O r d e r R e l e a s e
20
15 25
7
OM5-34
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
N e t R e q u ir e m e n t s
P la n n e d O r d e r R e c e ip t s
P la n n e d O r d e r R e le a s e
20
15 25
7
7
OM5-35
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
N e t R e q u ire m e n ts
P la n n e d O r d e r R e c e i p t s
P la n n e d O r d e r R e l e a s e
20
15 25
7
7
3
OM5-36
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
20
15 25
7
7
N e t R e q u ir e m e n t s
3
P la n n e d O r d e r R e c e ip t s
3
P la n n e d O r d e r R e le a s e
OM5-37
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
20
15 25
7
7
N e t R e q u ire m e n ts
3
P la n n e d O r d e r R e c e i p t s
3
P la n n e d O r d e r R e l e a s e
3
OM5-38
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
20
15 25
7
7
0
N e t R e q u ir e m e n t s
3
P la n n e d O r d e r R e c e ip t s
3
P la n n e d O r d e r R e le a s e
3
OM5-39
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
0
0
N e t R e q u ire m e n ts
3
6
P la n n e d O r d e r R e c e i p t s
3
6
P la n n e d O r d e r R e l e a s e
20
15 25
7
3
7
6
0
OM5-40
MRP & ERP
MRP: Problem 2 (a)- Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
0
0
N e t R e q u ire m e n ts
3
6
14
P la n n e d O r d e r R e c e i p t s
3
6
14
P la n n e d O r d e r R e l e a s e
20
15 25
7
3
7
6
14
0
0
OM5-41
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
N e t R e q u ir e m e n t s
P la n n e d O r d e r R e c e ip t s
P la n n e d O r d e r R e le a s e
20
15 25
7
7
OM5-42
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
N e t R e q u ire m e n ts
P la n n e d O r d e r R e c e i p t s
P la n n e d O r d e r R e l e a s e
20
15 25
7
7
3
OM5-43
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
20
15 25
7
7
N e t R e q u ir e m e n t s
3
P la n n e d O r d e r R e c e ip t s
15
P la n n e d O r d e r R e le a s e
OM5-44
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
20
15 25
7
7
N e t R e q u ir e m e n t s
3
P la n n e d O r d e r R e c e ip t s
15
P la n n e d O r d e r R e le a s e
15
OM5-45
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
20
15 25
7
7
12
N e t R e q u ire m e n ts
3
P la n n e d O r d e r R e c e i p t s
15
P la n n e d O r d e r R e l e a s e
15
OM5-46
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
20
15 25
7
7
12
N e t R e q u ir e m e n t s
3
P la n n e d O r d e r R e c e ip t s
15
P la n n e d O r d e r R e le a s e
15
6
OM5-47
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
20
15 25
7
7
12
N e t R e q u ir e m e n t s
3
P la n n e d O r d e r R e c e ip t s
15
P la n n e d O r d e r R e le a s e
15
6
6
OM5-48
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G r o s s R e q u ir e m e n t s
S c h e d u le d R e c e ip t s
A v a ila b le O n H a n d
20
15 25
7
7
12
N e t R e q u ir e m e n t s
3
P la n n e d O r d e r R e c e ip t s
15
P la n n e d O r d e r R e le a s e
15
6
6
8
OM5-49
MRP & ERP
MRP: Problem 2 (b) - Solution
W eek
1
2
3
4
5
6
7
8
5
10
20
18
0
10
6
0
14
G ro ss R e q u ir e m e n ts
S c h e d u le d R e c e i p t s
A v a i la b le O n H a n d
20
15 25
7
7
12
6
6
7
N e t R e q u ire m e n ts
3
8
P la n n e d O r d e r R e c e i p t s
15
15
P la n n e d O r d e r R e l e a s e
15
15
OM5-50
MRP & ERP
MRP: Problem 3
• A company produces two products: Product A
and Product Q. The owner has received an
order from a customer of 103 units of product
A for week 8 and 200 units of product Q for
week 7. The product structures and other
pertinent information are given below in the
table as well as on top of each MRP table.
Develop a materials requirements plan that
will provide the customer the two products.
OM5-51
MRP & ERP
MRP: Problem 3
I te m
A
L e a d T im e
(W e e k s )
4
D ir e c t
C o m p o n e n ts
B (1 ), C (2 )
L o t-S iz in g
R u le
1
Q
2
C (1 ), E (1 )
1
B
3
------
1
C
2
D (1 ), E (2 )
1
D
1
------
200
E
1
------
500
OM5-52
MRP & ERP
MRP: Problem 3 - Solution
Item: A
On hand = 18
Safety Stock = 5
Therefore, Available-On-Hand = 18 – 5 – 10 = 3
Week
1
Gross Requirements
Net Requirements
Planned Order Receipt
Planned order Release
3
4
5
6
7
8
103
Scheduled Receipts
Available On Hand
2
Allocated = 10
3
OM5-53
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Week
1
2
3
4
5
6
7
Gross Requirements
8
103
Scheduled Receipts
Available On Hand
Net Requirements
Planned Order Receipt
Planned order Release
3
3
3
3
3
3
3
3
100
OM5-54
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Week
1
2
3
4
5
6
7
Gross Requirements
8
103
Scheduled Receipts
Available On Hand
3
3
3
3
3
3
3
3
Net Requirements
100
Planned Order Receipt
100
Planned order Release
OM5-55
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Week
1
2
3
4
5
6
7
Gross Requirements
8
103
Scheduled Receipts
Available On Hand
3
3
3
3
3
3
3
3
Net Requirements
100
Planned Order Receipt
100
Planned order Release
100
OM5-56
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: Q
On hand = 6
Safety Stock = 6
Therefore, Available-On-Hand = 6
Week
1
2
3
Allocated = 0
4
5
6
Gross Requirements
200
Scheduled Receipts
Available On Hand
Net Requirements
Planned Order Receipt
Planned order Release
7
0
0
0
0
0
0
0
8
OM5-57
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: Q
On hand = 6
Week
Safety Stock = 6
1
2
3
Allocated = 0
4
5
6
Gross Requirements
7
200
Scheduled Receipts
Available On Hand
Net Requirements
Planned Order Receipt
Planned order Release
0
0
0
0
0
0
0
200
8
OM5-58
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: Q
On hand = 6
Week
Safety Stock = 6
1
2
3
Allocated = 0
4
5
6
Gross Requirements
7
200
Scheduled Receipts
Available On Hand
0
0
0
0
0
0
0
Net Requirements
200
Planned Order Receipt
200
Planned order Release
8
OM5-59
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: Q
On hand = 6
Week
Safety Stock = 6
1
2
3
Allocated = 0
4
5
6
Gross Requirements
7
200
Scheduled Receipts
Available On Hand
0
0
0
0
0
0
0
Net Requirements
200
Planned Order Receipt
200
Planned order Release
200
8
OM5-60
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: B
On hand = 10
Week
Safety Stock = 0
1
2
3
Gross Requirements
Net Requirements
Planned Order Receipt
Planned order Release
4
100
Scheduled Receipts
Available On Hand
Allocated = 0
10 10
10
10
5
6
7
8
OM5-61
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: B
On hand = 10
Week
Safety Stock = 0
1
2
3
Gross Requirements
Allocated = 0
4
100
Scheduled Receipts
Available On Hand
Net Requirements
Planned Order Receipt
Planned order Release
10
10
10
10
90
5
6
7
8
OM5-62
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: B
On hand = 10
Week
Safety Stock = 0
1
2
3
Gross Requirements
Allocated = 0
4
5
6
7
8
0
0
0
0
100
Scheduled Receipts
Available On Hand
10
10
10
10
0
Net Requirements
90
Planned Order Receipt
90
Planned order Release
90
OM5-63
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: C
On hand = 20
Week
Safety Stock = 0
1
2
3
Gross Requirements
Net Requirements
Planned Order Receipt
Planned order Release
4
5
200 200
Scheduled Receipts
Available On Hand
Allocated = 0
20 20
20
20
6
7
8
OM5-64
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: C
On hand = 20
Week
Safety Stock = 0
1
2
3
Gross Requirements
Allocated = 0
4
200 200
Scheduled Receipts
Available On Hand
20 20
20
20
0
Net Requirements
180
Planned Order Receipt
180
Planned order Release
5
180
6
7
8
OM5-65
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: C
On hand = 20
Week
Safety Stock = 0
1
2
3
Gross Requirements
Allocated = 0
4
5
6
7
8
0
0
0
200 200
Scheduled Receipts
Available On Hand
20 20
20
20
0
0
Net Requirements
180 200
Planned Order Receipt
180 200
Planned order Release
180 200
OM5-66
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: D
On hand = 0
Week
Safety Stock = 0
1
Gross Requirements
Net Requirements
Planned Order Receipt
Planned order Release
3
180 200
Scheduled Receipts
Available On Hand
2
0
0
Allocated = 0
4
5
6
7
8
OM5-67
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: D
On hand = 0
Week
Safety Stock = 0
1
Gross Requirements
2
180 200
Scheduled Receipts
Available On Hand
Net Requirements
Planned Order Receipt
Planned order Release
3
0
0
180
Allocated = 0
4
5
6
7
8
OM5-68
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: D
On hand = 0
Week
Safety Stock = 0
1
Gross Requirements
2
180 200
Scheduled Receipts
Available On Hand
0
0
Net Requirements
180
Planned Order Receipt
200
Planned order Release
3
Allocated = 0
4
5
6
7
8
OM5-69
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: D
On hand = 0
Week
Safety Stock = 0
1
Gross Requirements
2
180 200
Scheduled Receipts
Available On Hand
0
0
Net Requirements
180
Planned Order Receipt
200
Planned order Release
3
200
Allocated = 0
4
5
6
7
8
OM5-70
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: D
On hand = 0
Week
Safety Stock = 0
1
Gross Requirements
2
3
Allocated = 0
4
5
6
7
8
20
20
20
20
20
180 200
Scheduled Receipts
Available On Hand
0
0
20
20
Net Requirements
180 180
Planned Order Receipt
200 200
Planned order Release
200 200
OM5-71
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: E
On hand = 30
Week
Safety Stock = 0
1
Gross Requirements
Net Requirements
Planned Order Receipt
Planned Order Release
3
360 400
Scheduled Receipts
Available On Hand
2
30 30
Allocated = 0
4
5
200
6
7
8
OM5-72
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: E
On hand = 30
Week
Safety Stock = 0
1
Gross Requirements
2
360 400
Scheduled Receipts
Available On Hand
30 30 170
Net Requirements
330
Planned Order Receipt
500
Planned Order Release
3
500
Allocated = 0
4
5
200
6
7
8
OM5-73
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: E
On hand = 30
Week
Gross Requirements
Safety Stock = 0
1
2
3
360 400
Scheduled Receipts
Available On Hand
30 30 170 270
Net Requirements
330 230
Planned Order Receipt
500 500
Planned Order Release
500 500
Allocated = 0
4
5
200
6
7
8
OM5-74
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: E
On hand = 30
Week
Gross Requirements
Safety Stock = 0
1
2
3
Allocated = 0
4
360 400
Scheduled Receipts
Available On Hand
30 30 170 270 270
Net Requirements
330 230
Planned Order Receipt
500 500
Planned Order Release
500 500
5
200
6
7
8
OM5-75
MRP & ERP
MRP: Problem 3 – Solution (cont.)
Item: E
On hand = 30
Week
Gross Requirements
Safety Stock = 0
1
2
3
360 400
Allocated = 0
4
5
6
7
8
70
70
70
200
Scheduled Receipts
Available On Hand
30 30 170 270 270 70
Net Requirements
330 230
Planned Order Receipt
500 500
Planned Order Release
500 500
OM5-76
MRP & ERP
MRP II
• Expanded MRP with and emphasis
placed on integration
– Financial planning
– Marketing
– Engineering
– Purchasing
– Manufacturing
OM5-77
MRP & ERP
MRP II
Manufacturing
Master
production schedule
Marketing
Production
plan
MRP
Rough-cut
capacity planning
Capacity
planning
Adjust
production plan
Yes
Problems?
No
Requirements
schedules
No
Problems?
Adjust master schedule
Market
Demand
Finance
Yes
OM5-78
MRP & ERP
ERP
• Enterprise resource planning (ERP): An
expanded effort to integrate
standardized record-keeping that will
permit information sharing throughout
the organization
OM5-79
MRP & ERP
MRP II and ERP Systems
• Expanded MRP with and emphasis
placed on integration
–
Financial planning
–
Marketing
–
Engineering
–
Purchasing
–
Manufacturing
–
Other Capabilities