15 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Resource Planning 15 For Operations Management, 9e by Krajewski/Ritzman/Malhotra © 2010 Pearson Education Workshop: #21

15 – 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Resource Planning At the heart of any organization Starts with sales and operations plans (or aggregate plan) and plans the input requirements A process relative to the firm’s competitive priorities and an important part of managing supply chains

15 – 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Resource Planning Aggregate Plan

15 – 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Materials Requirements Planning An information system that translates master schedule requirements for end items into time-phased requirements for subassemblies, components, and raw materials. Aids in managing dependent demand inventory. Primary Inputs: Master Production Schedule Bill of Materials Inventory Records

15 – 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Inventory transactions Inventory records Bills of materials Engineering and process designs Other sources of demand Authorized master production schedule Material requirements plan MRP explosion MRP Inputs Figure 15.2 – Material Requirements Plan Inputs

15 – 6 Master Production Schedule Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Aggregate Plan MPS for a single end item

15 – 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. A record of all components of an item Shows the parent-component relationship The usage quantities are derived from engineering and process design Bill of Materials Five common terms  End items  Intermediate items  Subassemblies  Purchased items Part commonality (sometimes called standardization of parts or modularity)

15 – 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Seat cushion Seat-frame boards Front legs A Ladder-back chair Back legs Leg supports Back slats Bill of Materials Figure 15.4 –BOM for a Ladder-Back Chair

15 – 9 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Bill of Materials

15 – 10 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. J (4) Seat-frame boards Bill of Materials G (4) Back slats F (2) Back legs I (1) Seat cushion H (1) Seat frame C (1) Seat subassembly D (2) Front legs B (1) Ladder-back subassembly E (4) Leg supports A Ladder-back chair Figure 15.4 –BOM for a Ladder-Back Chair

15 – 11 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Bill of Materials If 50 units of of end item A are to be assembled, how many additional units of D are needed? Of E? ItemABCDEFG LT (wks) Amt. OH A B(3)C(1) G(1) E(2)F(1)D(1)

15 – 12 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.

15 – 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Inventory Record Inventory transactions are the basic building blocks of up-to-date records Transactions include releasing new orders, receiving scheduled receipts, adjusting due dates for scheduled receipts, withdrawing inventory, canceling orders, correcting inventory errors, rejecting shipments, and verifying losses and stock returns Inventory records divide the future into time periods called time buckets Keep track of inventory levels and component replenishment needs

15 – 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Inventory Record The time-phase information contained in the inventory record consists of:  Gross requirements  Scheduled receipts  Projected on-hand inventory  Planned receipts  Planned order releases =+– Projected on-hand inventory balance at end of week t Inventory on hand at end of week t –1 Scheduled or planned receipts in week t Gross requirements in week t

15 – 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Lot-sizing rules Fixed order quantity (FOQ) rule maintains the same order quantity each time an order is issued Lot for lot (L4L), order what is necessary Periodic order quantity (POQ), order what is necessary to handle P periods Planning Factors

15 – 16 MRP Example, Given MPS, Inv Records, BOM Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. MPS for End Item A, LT=1, Beg Inv=0 A B(1)C(2) D(1) BOM ItemABCD LT1123 Sch Rec 200 wk 1, 100 wk 6 Amt OH Rule L4L, min 120L4LLot Size, Q=500 Inventory Records

15 – 17 MRP Example, Solution Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.

15 – 18 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.