Assignment # 3

Topic:

Material Requirement Planning

Submitted To:

Mr Amer Butt

Submitted By:

Usman Saeed Malik

Roll No:

17132120-011

Department:

BBA 6th
 Material Requirement Planning(MRP)
Material Requirements Planning (MRP) is intended to help makers in stock and
creation the board. Utilizing MRP guarantees that materials will be accessible in
adequate amount and at the correct time for creation to happen, without bringing
about overabundance costs by having the materials close by too soon. MRP helps
with creating and (varying) overhauling creation intends to satisfy expected needs
and renewal intends to guarantee the opportune accessibility of crude materials and
all degrees of item segments.

MRP starts by aggregating a Bill of Materials (BOM) for each finished result or
segment of intrigue. This is a posting of the segments and amounts that are
expected to make the final result or segment. Hypothetically, the gathering of BOMs
proceeds recursively, identifying the subcomponents that are expected to produce
every segment, until just crude materials show up in the created BOMs. By and by, a
producer may like to broaden the BOM specification for just a predetermined
number of levels and to expect that segments and additionally crude materials
underneath that level are accessible on request.

Next, MRP requires data on the lead times related with each assembling or get
together system that is required to deliver the segments and finished results. Lead
time is the time required to gather or assembling the required segments into the
final result (or more significant level part), and in this way is the time slipped by
between where every single required segment are available and the finish of get
together or fabricating. These lead times might be arranged per unit of every
segment/item or might be founded on foreordained bunch sizes.

MRP consolidates the BOMs, the lead times, and gauges of interest for finished
results to create the Master Production Schedule, which subtleties a calendar of
gathering and creation that empowers the maker to fulfill the evaluated need. This
calendar tends to just the last degree of gathering or creation (bringing about final
results), and incorporates both the planning and amounts of creation. The Master
Production Schedule fills in as the reason for all additionally yield data from MRP.

Using the Master Production Schedule as a starting point, it is a conceptually simple (but
computationally demanding) task to combine it with the data on lead times and BOMs to
derive a schedule of component (and possibly raw materials) requirements, through as
many levels of assembly and production as the manufacturer chooses. This schedule can
account for such factors as work-in-progress, current inventory of and pending orders for
materials and components, and direct demand for components as service items. Using this
schedule of requirements, the manufacturer must determine a material replenishment
strategy that satisfies these requirements. A wide variety of ordering rules and heuristics
can be incorporated into computer-based MRP models. 
In addition to the material requirements, other useful data can be generated from the
Master Production Schedule. These include the projected inventory levels for any end
product, the projected schedule for any assembly or production process, and the projected
utilization of capacity for a particular production operation. Any of this information should
aid in evaluating current or potential materials replenishment strategies. 
 
Computers are instrumental in any real-world implementation of MRP, due to the large
amount of data processing required to generate initial material requirements. Additionally,
it's probable that the entire analysis will have to be repeated several times in response to
changing conditions (for example, changes in demand, manufacturing processes, or material
supply). This makes the need for computers even clearer. 
This example illustrates the use of SAS/OR software (specifically, PROC CPM and PROC
GANTT) in a SAS/AF application that performs Material Requirements Planning for a
hypothetical clothing manufacturer. A small number of data steps and relatively simple
procedure calls from SAS/OR, Base SAS, and SAS/GRAPH accomplish all the computational
work needed to support this application. The few simplifying assumptions made to limit the
scope of this sample application could in practice be relaxed to make the application useful
in a more complex and more realistic MRP setting. This application could also serve as an
MRP module in a broader production and inventory control system. 
Material requirements planning (MRP), a comprehensive planning and control technique
based upon the dependent demand principle, enables manufacturing organizations to
provide better customer service, reduce inventory investment, and increase resource
utilization. This paper extends the dependent demand principle to the service sector and
thus provides the basis for applying MRP to higher education. In the short run,
administrators can schedule the necessary number of required courses and load each
course based on student priorities to provide increased customer (i.e., student) service and
faculty utilization. In the long run, course enrollment forecasts can be utilized by
administrators to plan and control changes in faculty resources across departments and
schools. 
Prior to MRP and before computers dominated industry, reorder point (ROP)reorder-
quantity (ROQ) type methods like EOQ (economic order quantity) had been used in
manufacturing and inventory management
MRP was created initially to supply the Polaris program then, in 1964, as a response to
the Toyota Manufacturing Program, Joseph Rollick developed material requirements
planning (MRP). The first company to use MRP was Black & Decker in 1964, with Dick Alban
as project leader. Or lick’s 1975 book Material Requirements Planning has the subtitle The
New Way of Life in Production and Inventory Management. By 1975, MRP was implemented
in 700 companies. This number had grown to about 8,000 by 1981.
In 1983, Oliver Wight developed MRP into manufacturing resource planning (MRP II). In the
1980s, Joe Or licky's MRP evolved into Oliver Wight's manufacturing resource planning (MRP
II) which brings master scheduling, rough-cut capacity planning, capacity requirements
planning, S&OP in 1983 and other concepts to classical MRP. By 1989, about one third of
the software industry was MRP II software sold to American industry ($1.2 billion worth of
software).
Independent demand is demand originating outside the plant or production system, while
dependent demand is demand for components. The bill of materials (BOM) specifies the
relationship between the end product (independent demand) and the components
(dependent demand). MRP takes as input the information contained in the BOM.
The basic functions of an MRP system include: inventory control, bill of material processing,
and elementary scheduling. MRP helps organizations to maintain low inventory levels. It is
used to plan manufacturing, purchasing and delivering activities.
"Manufacturing organizations, whatever their products, face the same daily practical
problem - that customers want products to be available in a shorter time than it takes to
make them. This means that some level of planning is required."
Companies need to control the types and quantities of materials they purchase, plan which
products are to be produced and in what quantities and ensure that they are able to meet
current and future customer demand, all at the lowest possible cost. Making a bad decision
in any of these areas will make the company lose money. A few examples are given below:
If company purchases insufficient quantities of an item used in manufacturing (or the wrong
item) it may be unable to meet contract obligations to supply products on time.
If company purchases excessive quantities of an item, money are wasted - the excess
quantity ties up cash while it remains as stock that might never be used at all.
Beginning production of an order at the wrong time can cause customer deadlines to be
missed.