Structure of the MRP System
BOM
(Bill-of-Material)
Master Production
Schedule
Lead Times
(Item Master File)
MRP by period report
MRP by date report
MRP
Programs
Planned orders report
Inventory Data
Purchase requirements
Purchasing data
Exception reports
Master Production Schedule

Drives MRP process with a schedule of
finished products

Quantities represent production not demand

Quantities may consist of a combination of
customer orders & demand forecasts

Quantities represent what needs to be
produced, not what can be produced
Master Production Schedule
MPS
Period
Item
1
2
3
4
5
6
7
8
Clipboard
86 93 119 100 100 100 100 100
Lapboard
0 50
0 50
0 50
0 50
Lapdesk
75 120 47 20 17 10
0
0
Pencil Case 125 125 125 125 125 125 125 125
Product Structure Tree
Clipboard
Clip Assembly
(10)
Rivet
(2)
Top Clip
(1)
Bottom Clip
(1)
Pivot
(1)
Spring
(1)
Sheet
Metal
(8 in2)
Sheet
Metal
(8 in2)
Spring
Steel
(10 in.)
Iron
Rod
(3 in.)
Level 0
Board
(1)
Pressboard
(1)
Level 1
Finish
(2oz.) Level 2
Level 3
Indented Bill of Material
LEVEL
0----1----2----3--2----3--2----3--2----3-1---1----2---2--
ITEM
Unit of Measure
Clipboard
Ea
Clip Assembly
Ea
Top Clip
Ea
Sheet Metal
In2
Bottom Clip
Ea
Sheet Metal
In2
Pivot
Ea
Iron Rod
In
Spring
Ea
Spring Steel
In
Rivet
Ea
Board
Ea
Press Board
Ea
Finish
Oz
Quantity
1
10
1
8
1
8
1
3
1
10
2
1
1
2
The MRP Matrix
Lot size:
LT:
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned order receipts
Planned order releases


PD
1
2
3
4
5
6
7
8
Item
• name or number identifying scheduled item
LLC
• low-level-code; lowest level at which item
appears in a product structure
9
10
Parts Of MRP Matrix

Lot size
• order multiples of this qty; can be min/max qty

LT (lead time)
• time from order placement to receipt

PD (past-due)
• orders behind schedule
Gross requirements
• demand for item by time period


Scheduled receipts

Projected on hand
• quantity already on order & receipt date
• released orders become scheduled receipts
• expected on-hand inventory at beginning of
period

Net requirements

Planned order receipts

Planned order releases
• net amount needed after on-hand adjustments
• net requirements adjusted for lot-sizing
• planned order receipts offset by lead time
The Alpha Beta Company
A
LT=3
C(3)
LT=4
Item On Hand
B
LT=2
D(2)
LT=2
D(3)
LT=2
Scheduled Receipts
Lot Size
MPS
A
10
0
1
100, period 8
B
5
0
1
200, period 6
C
140
0
150
---
D
200
250, period 2
250
---
MRP Matrices For A & B
Item: A
LLC: 0
Lot size: 1
LT: 3
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned order receipts
Planned order releases
Item: B
LLC: 0
Lot size: 1
LT: 2
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned order receipts
Planned order releases
PD
10
1
2
10
10
Period
3
4
10
10
5
6
7
8
100
10
10
10
10
90
90
90
PD
5
1
2
Period
3
4
5
5
5
5
195
5
6
200
7
8
5
5
195
195
0
0
MRP Matrices For C & D
Item: C
LLC: 1
Lot size: 150
LT: 4
Period
PD
1
2
3
4
Gross requirements
5
6
7
8
20
20
20
270
Scheduled receipts
Projected on hand
140
140
140
140
140
140
Net requirements
130
Planned order receipts
150
Planned order releases
Item: D
LLC: 1
Lot size: 250 LT: 2
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned order receipts
Planned order releases
150
PD
200
Period
3
4
585
1
2
200
250
450
450
250
250
450
135
250
5
180
6
7
8
115
65
250
185
185
185
Alpha Beta Planned Order
Report
Period
1
2
3
4
5
Item
C
D
D
B
A
Quantity
150
250
250
195
90
MRP and The Production
Planning Process
Forecast &
Firm Orders
Aggregate
Production
Planning
Material
Requirements
Planning
Master
Production
Scheduling
Resource
Availability
No, modify CRP, MRP, or MPS
Capacity
Requirements
Planning
Realistic?
Yes
Shop
Floor
Schedules
MRP Benefits




Increased customer satisfaction due to
meeting delivery schedules
Faster response to market changes
Improved labor & equipment utilization
Better inventory planning & scheduling
• Reduced inventory levels without reduced
customer service

Mechanism for communication between
departments
MRP Requirements

Computer system
Mainly discrete products
Accurate master production schedule
Accurate inventory status

Stable lead times



• 99% inventory accuracy
© 1984-1994 T/Maker Co.
Inventory Accuracy
1. Maintain orderly stockrooms
2. Control access to stockrooms
3. Establish & enforce procedures for
inventory withdrawal
4. Ensure prompt and accurate entry of inventory
transactions
5. Take physical inventory count on a regular basis
6. Reconcile inventory discrepancies in a timely
manner (use cycle counting)