Imse 4350 Ch4

Topics: Material requirements planning, Manufacturing resource planning, Enterprise resource planning Pages: 27 (893 words) Published: December 13, 2014
4. Production and
Material Planning

Planning Process
Aggregate production plan

Master production
schedule
Material requirements plan
Capacity plan

Realistic
No
Yes
Execute capacity plans
Execute material plans

Master Production
Schedule

A time-phased production plan that
specifies how many of, and when to build,
each end item
 Must be in accordance with the aggregate
production plan, which sets the overall
level of output in broad terms


MPS Example 1
Months
Aggregate Production Plan
(shows the total
quantity of amplifiers)
Weeks

1

January

February

1,500

1,200

2

3

4

5

6

7

8

Master Production Schedule
(shows the specific type and
quantity of amplifier to be
produced
240 watt amplifier
150 watt amplifier
75 watt amplifier

100

100
500

100
500

300

100
450

450
100

MPS Planning


Lot-for-lot or batch production policies
Ft = forecast for period t
Ot = (confirmed) customer orders for period t
It = end-item inventory in period t
Qt = MPS, manufacturing quantity in period t

MPS Example 2
Io = 1600, lot for lot or batch
W1
W2
W3
W4
W5
W6
W7
W8
= 2500
 

Ft

1000 1000 1000 1000 2000 2000 2000 2000

Ot

1200

It
Qt

800

300

200

100

0

0

0
 

 

 
W1

 

 
W2

 
W3

 
W4

 
W5

 
W6

 
W7

W8

Ft

1000 1000 1000 1000 2000 2000 2000 2000

Ot

1200

It
Qt

800

300

200

100

0

0

0
 

 

 

 

 

 

 

 

 

Material Requirements
Planning (MRP)
Determines quantity & timing of
dependent demand items
 Creates requirements and schedules
identifying the parts, components, and
materials necessary to produce the end
products specified in the MPS


Objectives of MRP
Minimize inventory level
 Maximize operating efficiency
 Improve customer service


Inputs of MRP
Master production schedule
 Specifications or bills-of-material
 Inventory availability
 Purchase orders outstanding
 Lead times


Structure of the MRP
System
Data Files
BOM

Output Reports

Master
production schedule

MRP by
period report

MRP by
date report

Lead times
(Item master file)

Planned order
report

Inventory data

Purchasing data

Material
requirement
planning
programs
(computer and
software)

Purchase advice

Exception reports
Order early or late
or not needed
Order quantity too
small or too large

Bill of Material (BOM)
List of components, ingredients, and
materials needed to make product
 Provides product structure





Items above given level are called parents
Items below given level are called children

Product Structure Diagram
Level
0

Product structure for “Awesome” (A)
A

1

2

3

12” Speaker kit
C(3) Std.
w/ amp-booster

B(2) Std. 12” Speaker kit

E(2)

D(2)

F(2) Std. 12” Speaker

E(2)
Packing box and
installation kit of wire,
bolts, and screws

booster
assembly

G(1)

D(2)

Amp-booster
12” Speaker

12” Speaker

BOM
Lvl
0
1
1
2
2
3
3


Part
A
B
C
E
F
D
G

Qty
1
1
1
1
1
1
1

UM
EA
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