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Research Paper

Research Paper

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Published by: jain8687 on Aug 26, 2010
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Research paper on

Jaipuria Institute of Management, Jaipur

Purpose:This research paper may help the United Electric Equipment Company Ltd. to reduce the cost and produce more through the MRP, as it would help to make the better judgment about the resource maximization of the company. Although it is not used easily because of it complexity, it is possible to conduct MRP by hand as well. And there are many other software available in the market for solving MRP. Methodology/ design/ approach:This research has been conducted by collecting a data from a company related to there material requirement. Following data is collected from the company:1. Composition of finished goods 2. Lead time 3. Item master file 4. Annual demand 5. Ordering cost 6. Caring cost 7. Handling cost MS EXCEL is used for solving MRP.

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This contract with ³Independent´ demand items which must be forecast. which in turn are dependent on market demand. Ensure the availability of material. Their demand is ³Dependent´ on Production Schedule of primary and finished product. scheduling and control varies substantially from high volume continues to relatively low volume intermittent production system. MRP keeps inventory level at minimum while assuring that required material are available when needed. iii. an efficient material control system. and rescheduling mechanism for revising plans as change occurs. The nature of forecasting and planning production lot size is unique because of the dependent nature of demand for parts and components. It is also known as ³time phased requirement planning´. The main objective of MRP system is:i. related to planning. component and product for planned production and for customer delivery ii. and determine the size of that market require a regular forecasting model. The dependent demand implies that the process of determining how many items are needed and when they are needed is simply computed from how the end product is designed and production process is goes through. the periodic nature of production of intermittent system result in an immensely more complex detailed scheduling problem. MRP provides a precise scheduling system. Maintain the lowest possible level of inventory Plan manufacturing activities. it faces its own market. Although both the system may be producing finished product for the inventory. The general inventory control policies are means for the management of inventory of independent demand and the management of dependent demand is carried out by ³MATERIAL REQUIREMENT PLANNING´ MRP is a computer based production planning and inventory control system. delivery schedule and purchasing activities 2|P a ge .INTRODUCTION The nature of the problem and techniques. MRP is concerned with both production scheduling and inventory control of dependent demand in conjunction with end item demand. The term independence implies that there is distinct separate demand for the item that is.

may be briefly expanded as follows: Inventory: Order the right part Order in right quantity Order at right time Priorities: Order with the right due date Keep the due date Valid Capacity: Plan for complete load Plan an accurate load Plan for adequate time to view Future load 3|P a ge .The main purpose of MRP system. therefore.

and work in progress (WIP) inventories required in manufacturing a product. Information Technology plays a major role in designing and implementing Material Requirements Planning systems and processes as it provides information about manufacturing needs (linked with customer demand) as well as information about inventory levels. purchased parts. and when is it needed. In addition. Competition is continuously increasing with respect to price. In terms of manufacturing emphasis is placed on reducing cost while improving quality.LITERATURE MRP was pioneered in the 1970¶s with the work of Orlicky. Later evolved or became part of Integrated to Manufacturing Resource Planning systems. it is a procedure for planning and controlling the raw material. 4|P a ge . technological innovations cause competition to intensify. Removal of barriers. to calculate net material requirements and plan future production. how muchis needed. MRP techniques focus on optimizing inventory. ‡ MRP is a systematic planning-and-control methodology for production and inventory. quality and selection.Material Requirements Planning is a time phased priority-planning technique that calculatesmaterial requirements and schedules supply to meet demand across all products and parts inone or more plants. other factors such as timely delivery of the product become critical techniques. international cooperation. ‡ Specifically. What is Material Requirements Planning? The globalization of the economy and the liberalization of the trade markets have formulated new conditions in the market place which are characterized by instability and intensive competition in the business environment. service and promptness of delivery. ‡ MRP is designed to answer three questions: what is needed. MRP techniques are used to explode bills of material.

parts and raw material units necessary to manufacture one unit of the product of interest. production cycle times and supplier lead times then jointly determine when orders should be placed. Bill of Materials gives information about the product structure. The master schedule and bill of materials indicate what materials should be ordered. which lists exactly the parts or materials required to make each product o Production cycle times and material needs at each stage of the production cycle time o Supplier lead times. 5|P a ge .. Entries of the table map to units o each product to be produced at a given time period.e. MRP systems use four pieces of information to determine what material should be ordered and when o The master production schedule. which describes when each product is scheduled to be Manufactured o Bill of materials. Aggregate may refer to monthly production and detailed may refer to weekly or daily production. There are accounts of inventory annual turnover ratios ofgreater than 100. the master schedule.A key question to a MRP process is the number of times a company replenishes inventory within a year. i. Quantities are included both at aggregate and detailed levels. The master production schedule takes the form of a table in which rows represent products and columns represent time components. The Master Production Schedule includes quantities of products to be produced at a given time period. mainly reported by Japanese companies. One can readily realize that the ahigh inventory ratio is likely to be conducive to lowering production cost since less capital istied up to unused inventory.

and the appropriate quantities.CASE STUDY United Electric Equipment Company Ltd. and the schedule is modified if necessary. Meters used on single-family homes are of twobasic types for different voltage and amperage ranges. (But here we are taken voltage meter for your study. someparts are ordered from Ahmedabad and assembled all the parts in Jaipur. Being certain that application of MRP could contribute to improvingcompany¶s cost performance. The structure of the study is presented in the below Forecasting demand Master Production Schedule Structure of Study Bill of Materials File Item Master File Running the MRP Program The problem for the MRP system is to determine a production schedule that would identify each item. produces a line of electric meters installed in residential buildings. 6|P a ge .) In addition to complete meters. the period it is needed. This schedule is then checked for feasibility.

1. Forecasting Annual demand Month: Demand: January 6600 February 5940 March 6380 April 4400 May 5500 June 6380 Month: July Demand: August September 4400 5280 4840 OctoberNovember December 3200 6600 6160 2. Master Production Schedule 7|P a ge .



LEVEL 4 10 | P a g e LEVEL 3 .




TOTAL COST in L4L Method:- LEVELS LEVEL 4 LEVEL 3 LEVEL 2 LEVEL 1 TOTAL COST COST 2588800 1508800 1444400 6600 5548600 .





RECOMMENDATIONS It is recommended that United Electric Equipment Company should continue their work with L4L method.600) than Multiple method (Rs 209. KanishkaBedi . 56. And we come out with the result that company should go for L4L method as the cost incurred in that method is low (Rs 55. REFERENCES ‡ ‡ United Electric Company Production and Operation & Management. This is optimal cost which we calculated through MS EXCEL.TOTAL COST in MULTIPLE OF 1000 LEVELS LEVEL 4 LEVEL 3 LEVEL 2 LEVEL 1 TOTAL COST COST 8888800 4244800 2146400 5676600 20956600 CONCLUSION As per the objective of our project we calculate MRP of company with 2 methods which is L4L and Multiple methods. 48.600).

ac. 09571543721 ‡ JasspalMaan: jaspalk@jimj. 09829064508 ‡ Apeksh Sharma: apekshs@jimj.in.in.ac. 09929395345 ‡ Ankur Jain: ankurjain@jimj. 09887303448 ‡ PankilMoolchandani: pankilm@jimj.GROUP 3 MEMBERS ‡ AmitMathur: amintm@jimj. 09462206777 ‡ Narendra Singh: narendras@jimj.ac.in.in.in.ac.in.in.in.ac.ac. 09982228312 .ac. 09950191772 ‡ ArchanaYadav: archanay@jimj.ac. 09636977161 ‡ Awadhesh Sharma: awadheshs@jimj.

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