MRP exercises
- 2. BRIEFLY REMAINDER OF WHAT MRP IS AND ITS CHARACTERISTICS MRP is a dependent demand technique that uses a bill of-material, inventory, expected receipts, and a master production Schedule to determine material requirement. • In order to apply this method it will be needed to know: 1. What is to be made and when. 2. Materials and parts required to make the product. 3.What is in stock. 4. What is on order, also called expected receipts. 5. How long it takes to get various components. MRP Order Proposal Stock Sales Customer order Production order Forecast Historical of sales
- 3. NET MATERIAL REQUIREMENT PLAN (ELEMENTS) • Gross requirement: is the independent demand quantity for each ítem (given). • Schedule requirement: orders that have been placed but not yet completed (given). • Availabilities: estimate amount of inventory available each week after gross requirement have been satisfied. • Planned Order Receipts: quantity determined to be required for receipt at the beginning of a time period. • Planned Order Releases: amount of order planned in each time period.
- 4. NET MATERIAL REQUIREMENT PLAN (FORMULAS) Net Requirement = Gross Requirement – (availability + Schedule orders). Optimal Quantity Order = Q* = 2DS H where D= Annual usage. S= Set-up cost. H= Holding cost.
- 5. LOT SIZING TECHNIQUES • Lot for lot.- Produced exactly what is required. No: if set-up cost is significant high or unable to implement JIT (Just In Time). • Constant or Fixed Order Quantity. Specify a number of units arbitrarily to be ordered each time, an order is placed for a particular ítem. • Economic Order Quantity. A specific number of units, that will minimise the combined cost of order (acquiring and carrying inventory.
- 6. PROBLEM Nº 5 (problem definition) • A company manufactures products A and H and the following information is available: Products A and H Period 8 9 10 11 12 Gross requirement of A 100 50 150 Gross requirements of H 100 50 Item On hand inventory Lead time Components A 0 1 B (1); C (1) B 100 2 D(1); E(1) C 25 1 F(1); G(1) D 50 1 E 75 2 F 75 2 G 75 1 H 0 1 J (1), K (1), C(1) J 100 2 E(1), F(1) C 25 1 F(1), G(1) K 100 2 E(1); G(1) 1. Elaborate the product tree structure and represent the level code. 2. Besides the units required of A and H, there exists a demand of 30 units for item E (sold as repair element) in week 10. Modify the Gross materials requirement plan to reflect this change and elaborate the Net Material Requirement Plan.
- 7. PROBLEM Nº5 (SOLUTION) Product tree and representation of the level code. 1st level 2nd level Product A Product H B C CKJ D E F G E F E G F G
- 8. PROBLEM Nº5 (SOLUTION) There exists a demand of 30 units for item E in week 10, construct the MRP Table. NOTE: It has to been started from the top to the bottom. -The Gross requirement (GRP) for these to table will be directly subtracted from the exercise. Always the GRP of the ítem from the top will be directly given. -The lead time in both ítem: 1 week.
- 9. PROBLEM Nº5 (SOLUTION) • For Product A is required ítem B and C: -The Gross requirement in ítem B will be subtracted from the orders planned of product A. In the case of ítem C, the GRP will included the order planned for product H. -Availability is given by the exercise (there no safety stock in this exercise). -Lead time is two week for ítem B, and one week for ítem C.
- 10. PROBLEM Nº5 (SOLUTION) • For product H is required ítem J, K and C. -The Gross requirement of both ítems will be taken from the planned order of product H. -Availability: given. -Net req : gross req. Availabilies. -Lead time: ítem J (2 weeks); ítem K (2 weeks).
- 11. PROBLEM Nº5 (SOLUTION) • 2nd level : Item B is composed by ítem D and E. NOTE: Item E is also required for ítem J and K. Additionally in week 10, extra demand of 30. ItemE 1 2 3 4 5 6 7 8 9 10 11 12 Grossreq. 50 100 150 30 Plannedreceipt Availability 75 75 75 75 75 75 75 25 Netreq. 75 150 30 Plannedorderorder 75 150 30 Plannedorderrelease 75 150 30 PERIOD -Gross req. : For ítem D was subtracted from orders planned in ítem B, and for ítem E was subtracted form orders planned in ítem B, J, and K, and the extra demand in week 10 of 30 units. -Availabilities : given. -Net req: Gross req. Availabilities. -Lead time: 2 weeks for both ítems. Item D 1 2 3 4 5 6 7 8 9 10 11 12 Grossreq. 50 150 Planned receipt Availability 50 50 50 50 50 50 50 Netreq. 0 150 Planned orderorder 0 150 Planned orderrelease 150 PERIOD
- 12. PROBLEM Nº5 (SOLUTION) • The remainder ítems are F and G: ItemF 1 2 3 4 5 6 7 8 9 10 11 12 Grossreq. 50 100 100 50 150 Plannedreceipt Availability 75 75 75 75 75 75 25 Netreq. 75 100 50 150 Plannedorderorder 75 100 50 150 Plannedorderrelease 75 100 50 150 PERIOD ItemG 1 2 3 4 5 6 7 8 9 10 11 12 Grossreq. 50 100 100 50 150 Plannedreceipt Availability 75 75 75 75 75 75 25 Netreq. 75 100 50 150 Plannedorderorder 75 100 50 150 Plannedorderrelease 75 100 50 150 PERIOD -Gross req: ítem F will be subtracted from planned order of ítem C (x2), J and K. And for ítem G from planned orders of ítem C (x2), and J. -Availabilities: given. -Net req: Gross req. Availabilities. -Lead time: ítem F (2 weeks); ítem G (1 week).
- 13. PROBLEM Nº 7 (SOLUTION) • A company that manufactures product X and Y has the following information: Products X and Y Period 4 5 6 7 Gross requirement of X 50 150 Gross requirement of Y 100 50 Item On hand inventory Lead Time Components X 0 1 A (1), B (1) Y 0 1 B(1), F (1) A 100 2 C(1), D(1) B 25 1 E(1), F (1) C 50 1 D 75 2 E 75 1 F 115 1 You are asked to: 1. Elaborate the product tree structure and represent the level code. 2. Besides the requirements for X and Y, there exits also a demand of 30 units for item D (sold externally) in week 5. Modify the Gross Requirement to reflect this change and elaborate the Net Requirement Plan
- 14. PROBLEM Nº 7 (SOLUTION) • 1. Elaborate the product tree structure and represent the level code. X Y A B B F DC E F E F
- 15. PROBLEM Nº 7 (SOLUTION) There exists an extra demand of 30 units (ítem D). Additionally all ítem follows the lot-for-lot technique, excepts ítem F, which follows optimal order quantity technique. Order cost =140 m.u , holding cost: 1 m.u ITEM X 1 2 3 4 5 6 7 GROSS REQ. 50 150 PLANNED RECEIPT AVAILABILITY NET REQ. 50 150 PLANNED ORD R. 50 150 PLANNED ORD. RE 50 150 WEEKS ITEM Y 1 2 3 4 5 6 7 GROSS REQ. 100 50 PLANNED RECEIPT AVAILABILITY NET REQ. 100 50 PLANNED ORD R. 100 50 PLANNED ORD. RE 100 50 WEEKS -The Gross requirement (GRP) for these to table will be directly subtracted from the exercise. Always the GRP of the ítem from the top will be directly given. -The lead time in both ítem: 1 week.
- 16. PROBLEM Nº 7 (SOLUTION) • For product X is required ítem A and B. ITEM A 1 2 3 4 5 6 7 GROSS REQ. 50 150 PLANNED RECEIPT AVAILABILITY 100 100 100 100 50 50 NET REQ. 100 PLANNED ORD R. 100 PLANNED ORD. RE 100 WEEKS ITEM B 1 2 3 4 5 6 7 GROSS REQ. 100 50 50 150 PLANNED RECEIPT AVAILABILITY 25 25 25 NET REQ. 75 50 50 150 PLANNED ORD R. 75 50 50 150 PLANNED ORD. RE 75 50 50 150 WEEKS -The Gross requirement in ítem A will be subtracted from the orders planned of product X. In the case of ítem B, the GRP will include the order planned for product X and Y. -Availability is given by the exercise (there no safety stock in this exercise). -Lead time is two week for ítem A, and one week for ítem B.
- 17. PROBLEM Nº 7 (SOLUTION) • Item F Special characteristic (follows a fixed order quantity technique). ITEM F 1 2 3 4 5 6 7 GROSS REQ. 75 150 50 200 PLANNED RECEIPT AVAILABILITY 115 115 40 10 80 NET REQ. 110 40 120 PLANNED ORD R. 120 120 120 PLANNED ORD. RE 120 120 120 WEEKS -The Gross requirement in ítem F will be subtracted from the orders planned of product H, from ítem B (x2). -Availability is given by the exercise (there no safety stock in this exercise). -Lead time is two week for ítem B, and one week for ítem C. The planned order will be the one that minimize the cost of holding inventories. Optimal quantity = Q = ROOT ((2 X Ce x D) / Cp x Ɵ ) Q=ROOT (( 2 x 140 x 120) / 1 x 7) = 120
- 18. PROBLEM Nº 7 (SOLUTION) • 2nd level : For making ítem A is required ítem C and D. ITEM C 1 2 3 4 5 6 7 GROSS REQ. 100 PLANNED RECEIPT AVAILABILITY 50 50 50 50 NET REQ. 50 PLANNED ORD R. 50 PLANNED ORD. RE 50 WEEKS ITEM D 1 2 3 4 5 6 7 GROSS REQ. 100 30 PLANNED RECEIPT AVAILABILITY 75 75 75 75 NET REQ. 25 30 PLANNED ORD R. 25 30 PLANNED ORD. RE 25 30 WEEKS -Gross req: ítem C will be subtracted from planned order of ítem A. And for ítem D from planned orders of ítem A. -Availabilities: given. -Net req: Gross req. Availabilities. -Lead time: ítem C (1 weeks); ítem D (2 week).
- 19. PROBLEM Nº 7 (SOLUTION) • For making ítem B is required ítem E. ITEME 1 2 3 4 5 6 7 GROSSREQ. 75 50 50 150 PLANNEDRECEIPT AVAILABILITY 75 75 NETREQ. 50 50 150 PLANNEDORDR. 50 50 150 PLANNEDORD.RE 50 50 150 WEEKS -Gross req: ítem E will be subtracted from planned order of ítem B (x2). -Availabilities: given. -Net req: Gross req. Availabilities. -Lead time: ítem E (1 week).
- 20. SOLVED PROBLEM (problem definition) • The demand for item A in weeks 8, 10, and 11 are 50, 75, and 100 units, respectively. Consider the following data.
- 21. Answer: (a) and (b) (a) Draw the product tree for item A (b) Indicate the low-level code for each item
- 22. Answer (c): MRP records for each item are as follows:
- 23. Answer (c): MRP records for each item are as follows:
- 24. Answer (c): MRP records for each item are as follows:1 3 2
- 25. Answer (c): MRP records for each item are as follows: 11
- 26. Answer (c): MRP records for each item are as follows: 2
- 27. Answer (c): MRP records for each item are as follows: 3