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Chapter 10: Materials Requirements (Benefits of MRP (Increased efficiency,…
Chapter 10: Materials Requirements
Problem with MRP
Assume lead time is constant
Could not include resource planning in its system
No account of capacity in its calculations
Costing requirements
Equipment cost
. This comprises the purchasing of equipment and auxiliary components and installation.
Operating cost
which include maintenance, fuel and labour cost, consisting of both wages and injury compensation
Unit purchase cost
which is associated with purchasing the pallets and containers
Cost due to packaging and damaged material
Definition
Materials requirements planning
(MRP) is a planning technique which converts master production schedule of end products into detailed schedule of raw materials and parts used in those end products.
Objective of MRP
to improve customer service by meeting delivery schedules promised and shortening delivery lead times
to reduce inventory costs by reducing inventory levels
to improve plant operating efficiency by better use of productive resource
to ensure the inventory level is at minimum but high enough to but high enough to provide for customer need
Input of MRP
Bill Of Materials
(BOM) is a list of all sub-assemblies, intermediates, parts and raw materials that go into a parent assembly showing the quantity of each required to make an assembly
Inventory Records File
is a computerized record-keeping system for the inventory status of all sub-assemblies, components and raw materials
Master Production Schedule
states the requirements for individual end items by date and quantity
Terms
Capacity
plan for an adequate time to view future load
plan for an accurate load
plan for complete load
Inventory
Order the right part
Order the right time
Order the right quantity
Priority
Keep the due date valid
Order the right due date
Benefits of MRP
Increased efficiency
Reduce inventory levels
Improve labour & equipment utilization
Reduce lead time
Increased customer satisfaction
Ability to evaluate capacity requirements
reduce overall manufacturing costs
Dependent demand
dependent demand items are components of finished goods
raw materials
subassemblies
component parts
amount of inventory needed depends on the level of production of the final product