Chapter 10 : MATERIAL REQUIREMENT (MRP System Outputs: (b. Changes in…
Chapter 10 : MATERIAL REQUIREMENT
Material Requirement Planning is a special technique to plan the requirements of materials for production. For the manufacturing company to produce the end items to meet demands the availability of sufficient production capacity must be coordinated with the availability of all raw materials and purchased items from which, the end items are to be produced.
Objectives of MRP:
(b) It improves customer service by meeting delivery schedules promised and shortening the delivery lead times.
(c) It reduces inventory cost by reducing inventory levels.
(a) It determines the quantity and timing of finished goods demanded.
(d) It improves plant operating efficiency by better use of productive resources.
Material Requirement Planning System Inputs:
Bill of Material (BOM) File:
Inventory Status File:
Master Production Schedule (MPS):
MRP System Outputs:
b. Changes in planned orders (reschedule notices).
c. Planning reports like inventory forecast, purchase commitment reports, stock-out incidences, etc.
a. Planned order schedule which is a plan of the quantity of each material to be ordered in each time period. The order may be purchase order on the suppliers or production orders for parts or sub-assemblies on production departments.
d. To project capacity requirements.
Benefits of MRP:
helps in generating purchase order and in case of any changes, reschedule notices are also generated.
reduce inventory investment in dependent demand items while improving operational efficiency by removing the risk of shortages associated with the EOQ.
Planning, Engineering and Schedule:
MRP plans orders for purchasing and shop scheduling for the quantity of items that must be available in each time period to produce the end items. The orders are planned for enough ahead to allow adequate time for scheduled completion of the final product without having material waiting unnecessarily for entry into a particular stage of the production process.
MRP can improve flow of work, thereby reducing intermittent delays and reducing the manufacturing cycle time for the jobs.