Production Planning and Control

Materials Requirement Planning

Dr. Lotfi K. Gaafar

Production Planning and Control- Materials Requirement Planning (1)

Gaafar 2001

Production Planning and Control

The Production Control System
Demand
forecasting

Aggregate
planning

Materials
requirement
planning

Shop-floor
scheduling
and control

Inventory
management

Production Planning and Control- Materials Requirement Planning (2)

Sales and
order entry

Customer

Production

Shipping
and
receiving

Inventory

Vendors

Gaafar 2001

Material Requirements Planning

Given a master schedule, what raw materials and
components quantities are needed and when.
Bills of
Material

Requires:

Inventory
Status

Bill of material (Manufacturing tree)

Master Production
Scheduling
Material Requirements
Planning

Quantities and
Order Times

Inventory status
Lead times
Production Planning and Control- Materials Requirement Planning (3)

Gaafar 2001

Assumptions
1. Known deterministic demands.
2. Fixed, known production leadtimes.
3. Infinite capacity.

Idea is to back out demand for components by using

leadtimes and bills of material.

Production Planning and Control- Materials Requirement Planning (4)

Gaafar 2001

MRP Procedure
1. Netting: net requirements against projected inventory
2. Lot Sizing: planned order quantities
3. Time Phasing: planned orders backed out by leadtime
4. BOM Explosion: gross requirements for components

Production Planning and Control- Materials Requirement Planning (5)

Gaafar 2001

Inputs
Master Production Schedule (MPS): due dates and
quantities for all top level items
Bills of Material (BOM): for all parent items
Inventory Status: (on hand plus scheduled receipts) for all
items
Planned Leadtimes: for all items

Production Planning and Control- Materials Requirement Planning (6)

Gaafar 2001

Material Requirements Planning

Example
Consider the manufacturing tree
(BOM) and the accompanying
information.

Period
1
2
3
4
5
6
7
8

GR
10
15
12
16
15
12
18
14

Period
CT
B00
X10

Scheduled Order Receipts (SOR)

1
2
3
4
5
6
7
12 14 0
0
0
0
0
8
2
2
0
0
0
0
2
2
1
1
0
0
0

Production Planning and Control- Materials Requirement Planning (7)

8
0
0
0
Gaafar 2001

Material Requirements Planning

Example
CT
LT = 2

Time
GR
SOR
BI
NR
POR
EI
PORE

1
10
12
0
-2
0
2
11

2
15
14
2
-1
0
1
16

3
12
0
1
11
11
0
15

4
16
0
0
16
16
0
12

5
15
0
0
15
15
0
18

6
12
0
0
12
12
0
14

7
18
0
0
18
18
0
?

8
14
0
0
14
14
0
?

B00
LT = 1

Production Planning and Control- Materials Requirement Planning (8)

Gaafar 2001

Material Requirements Planning

Example
X10
LT = 1

33 X10 cannot be scheduled.

How many CTs will be affected?
How can we fix the problem?
Production Planning and Control- Materials Requirement Planning (9)

Gaafar 2001

Rough Cut Capacity Planning (RCCP)

Quick check on capacity of key resources
Use Bill of Resource (BOR) for each item in MPS
Generates usage of resources by exploding MPS against BOR
(offset by leadtimes)
Infeasibilities addressed by altering MPS or adding capacity (e.g.,
overtime)

Production Planning and Control- Materials Requirement Planning (10)

Gaafar 2001