Eoq, Ppd, L4L, Poq
Lot Sizing in MRP
•
•
•
•
•
The net requirements data is subjected lot sizing
Lot sizes developed can satisfy the net requirements for one or more weeks
The basic trade-off involves the elimination of one or more setups at the expense of carrying inventory longer
Lot sizing problem is basically one of converting requirements into a series of replenishment orders
Lot sizing problem generally considered in a local level; that is, only in terms of the one part and not its components
Characteristics of Net Requirements Demand
•
•
•
•
•
Net requirement does not satisfy the independent demand assumption of constant uniform demand.
The requirements are stated on a period-by-period basis (time-phased) – Discrete characteristic They can be lumpy; that is, they can vary substantially from period to period and even have periods with no demand requirements
Lot sizing procedure used for one part in an MRP system has a direct impact on the gross requirements data passed to its components parts
Use of procedures other than lot-for-lot tends to increase the requirement data’s lumpiness farther down in the product structure
Lot-Sizing Procedure
Lot-For-Lot
• Replenishment orders are planned as required
Table 1. Example problem: Weekly net requirement schedule
Week
1
2
3
4
5
6
7
8
9
10 11 12 13 14
Gross
65 10 20 10 15 20 70 180 250 270 230 40 0 10 requirements Scheduled
60
receipts
Projected
As planned order releases are not decided, projected available available 25 20 10 balances are not calculated balance Net
10 10 15 20 70 180 250 270 230 40 0 10
Requirements
Ordering cost = Rs 300 per order
Inventory carrying cost = Rs 2 per unit per week
Lead time = 1 week
Total net requirement (from period 3 to 14)= 1105
1105
Average weekly requirements =
= 92.1
12
•
For the above net requirements the lot-for-lot procedure gives the planned order releases as follows
Table 2. Lot-for-lot technique
Week
123
4
•
•
•
•
•
The net requirements data is subjected lot sizing
Lot sizes developed can satisfy the net requirements for one or more weeks
The basic trade-off involves the elimination of one or more setups at the expense of carrying inventory longer
Lot sizing problem is basically one of converting requirements into a series of replenishment orders
Lot sizing problem generally considered in a local level; that is, only in terms of the one part and not its components
Characteristics of Net Requirements Demand
•
•
•
•
•
Net requirement does not satisfy the independent demand assumption of constant uniform demand.
The requirements are stated on a period-by-period basis (time-phased) – Discrete characteristic They can be lumpy; that is, they can vary substantially from period to period and even have periods with no demand requirements
Lot sizing procedure used for one part in an MRP system has a direct impact on the gross requirements data passed to its components parts
Use of procedures other than lot-for-lot tends to increase the requirement data’s lumpiness farther down in the product structure
Lot-Sizing Procedure
Lot-For-Lot
• Replenishment orders are planned as required
Table 1. Example problem: Weekly net requirement schedule
Week
1
2
3
4
5
6
7
8
9
10 11 12 13 14
Gross
65 10 20 10 15 20 70 180 250 270 230 40 0 10 requirements Scheduled
60
receipts
Projected
As planned order releases are not decided, projected available available 25 20 10 balances are not calculated balance Net
10 10 15 20 70 180 250 270 230 40 0 10
Requirements
Ordering cost = Rs 300 per order
Inventory carrying cost = Rs 2 per unit per week
Lead time = 1 week
Total net requirement (from period 3 to 14)= 1105
1105
Average weekly requirements =
= 92.1
12
•
For the above net requirements the lot-for-lot procedure gives the planned order releases as follows
Table 2. Lot-for-lot technique
Week
123
4