Material Requirement Plan – Use explosion of Bill of Material for this.

BOM MRP with BOM Demand Pattern's

Explosion Explosion Impact on MRP
A Bill of • An MRP utilizes • Demand patterns,
Materials (BOM)
the BOM to including seasonal
is a detailed list
of all determine the variations, promotions,
components, raw materials and or unexpected surges,
materials, and components needed, affect the MRP. The
sub-assemblies their quantities, and MRP considers the
required to the timing of their demand forecast to
manufacture a procurement to calculate the materials
finished product, satisfy production required for
along with their plans based on production.
respective
demand forecasts.
quantities.
 Steps to Create an MRP Using BOM Explosion:
Key Points
1. Gather Information
Bill of Materials (BOM) for your product 1. This is a simplified example. Real MRP
Demand Forecast: Expected number of considers safety stock and minimum order
units produced each period (e.g., month). quantities.
2. Calculate Gross Requirements 2. Create a complete MRP for The Eagle's Eye
Suitcase by following these steps with your
Multiply the demand forecast by the
specific BOM and demand forecast. This ensures
quantity of each component needed per unit
you have the right materials at the right time for
(from BOM). This gives you the total
production without excess inventory costs.
number of each component needed per
period.

3. Factor in Lead Time

Determine the lead time for each

component (time taken to receive
materials after ordering).
 Prepare schedule for carrying out the production of planned quantity.

MRP for The Eagle's Eye Suitcase with Increasing Demand Key Adjustments:
Missing Piece: Bill of Materials (BOM)
We can't create a complete MRP without the BOM,
which details components and quantities needed per
suitcase. However, we can discuss adjustments for the
increasing demand pattern.
Benefits:
•Prevents stockouts and production delays.
•Reduces inventory holding costs.
•Improves production efficiency and timely
deliveries.
•Demand Forecast: Use a forecast reflecting the
increasing demand throughout the year.
•Gross Requirements:
• Multiply demand forecast by component
quantities (from BOM) per month.
• Consider adding a buffer percentage or
staggering orders for upcoming high-demand
months.
•Safety Stock: Increase safety stock levels, especially
for components with longer lead times.
•Net Requirements: Subtract adjusted gross
requirements from on-hand inventory for each
component per month.
•Planned Order Receipts: Schedule orders based on
net requirements and lead time to receive materials just
before production needs.