Operations Management II (ORM2BJ[D]22-3)

Session 17 → MRP (Continued) + Quality

Management and Control
Example – Lot Sizing Rule – Solutions

Dipankar Bose - XLRI

MRP – Solution – Product A with
Given Lot Size

December January February March

ID 100 130 110
DD -- -- --
GR 100 130 110
SR -- -- --
POH 70 110 120 150
PR 140 140 140
POR 140 140 140

Dipankar Bose - XLRI

MRP – Solution – Part B with Given
Lot Size

December January February March

ID 80 -- 70
DD 280 280 280
GR 360 280 350
SR -- 200 --
POH 250 90 210 260
PR 200 200 400
POR 200 200 400 ??

Dipankar Bose - XLRI

MRP – Solution – Product A with L4L

December January February March

ID 100 130 110
DD -- -- --
GR 100 130 110
SR -- -- --
POH 70 50 50 50
PR 80 130 110
POR 80 130 110

Dipankar Bose - XLRI

Material Requirements Planning
(MRP) Processing
◼ Known
◼ Bill of Materials (BOM)
◼ MPS for Final Product
◼ For each component/subassembly
◼ Beginning inventory
◼ Safety stock required
◼ Lead time for order
◼ Lot sizing rule

◼ Prepare
◼ MRP

Dipankar Bose - XLRI

MRP Outputs

◼ Planned orders
◼ Schedule indicating amount and timing of future orders

◼ Order releases
◼ Authorization for the execution of planned orders

◼ Changes
◼ Revisions of due dates or order quantities
◼ Cancellations of orders if any

◼ MRP Secondary Reports

◼ Performance-control reports/Planning
reports/Exception reports
Dipankar Bose - XLRI
Secondary Reports

◼ Performance control reports

◼ Inventory turnover
◼ % of deliver promises kept
◼ Stock-out incidents
◼ Planning reports
◼ Inventory forecast
◼ Purchase commitment report
◼ Pegging
◼ Exception reports – Requires management attention
◼ Late orders
◼ Excessive scraps

Dipankar Bose - XLRI

Updating the System

◼ Regenerative system
◼ Updates MRP records periodically, usually every week
◼ At this time New MPS/Updated inventory status file
/Up-to-date BOM are fed into the system
◼ Generates complete set of output

◼ Net-change system
◼ Updates MRP/MPS records as changes in MRP/MPS
occur
◼ MRP system is then activated to generate
◼ Only net changes to past MRP run
◼ Entire output is not generated
Dipankar Bose - XLRI
Quality Management and Control

Dipankar Bose - XLRI

What is Quality?

◼ Conformance to requirements
◼ Product → Degree to which a set of inherent
characteristics fulfills requirements
◼ Batch → Fraction non-defective

◼ Quality is inversely proportional to variability

◼ Quality improvement
◼ Reduction of variability in processes and products
◼ Also seen as “waste reduction”

Dipankar Bose - XLRI