1. Material Requirement Planning (MRP)
A computerized information system to aid in managing dependant demand inventory and scheduling replenishment orders
Purposes of MRP
Inventory – right part, quantity, time
Capacity – complete load
Priority – due date
Getting the right material to the right place at the right time

2. Material Requirement Planning (MRP)
Inputs to MRP
Bill of material (BOM)
Master production schedule (MPS)
Inventory record database
Bill of Material (BOM)
all the components of an item
usage quantities (for unit parent)
the parent-component relationships

3. Material Requirement Planning (MRP)
Bill of Material
Seat Assy
Ladder back
Assy
Back
slats
Seat
Frame
Seat
Cushion
Seat Frame
Board
Back
legs
Chair
Front
legs
Leg
supports

4. Material Requirement Planning (MRP)
Bill of Material
Chair
Ladder back
subassy
Front
legs
Leg
supports
Seat
subassy 1 2 4 1
Back
legs
Back
slats
Seat
Frame
Seat
Cushion 2 4 1 1
Seat Frame Board 4

5. Material Requirement Planning (MRP)
Master Production Schedule (MPS)
Details of how many end items will be produced within specified periods of time
April
May
Aggregate
670
Week number 1 2 3 4 5 6 7 8
Ladder-back
Chair
Kitchen chair
Desk chair
150
150
120
120
200
200
200
200

6. Material Requirement Planning (MRP) Projected on-hand inventory (37)
Inventory Record
A record that shows an item’s lot-size policy, lead time and various time-phased data
Lot size = 230 unit
Lead time = 2 wks
Week No. 1 2 3 4 5 6 7 8
Gross requirements
150
120
Scheduled receipt
Projected on-hand inventory (37)
Planned receipt
Planned order release
230
117
117
117
227
227 77
187
187
230
230
230
230

7. Material Requirement Planning (MRP) Projected on-hand inventory (37)
Inventory Record
Lot size = 230 unit
Lead time = 2 wks
Safety stock = 80 unit
Week No. 1 2 3 4 5 6 7 8
Gross requirements
150
120
Scheduled receipt
230
Projected on-hand inventory (37)
Planned receipt
Planned order release
117
117
117
227
227
307
187
187
230
230
230
230

8. Material Requirement Planning (MRP) Projected on-hand inventory (37)
Inventory Record
Lot for Lot
Lead time = 2 wks
Week No. 1 2 3 4 5 6 7 8
Gross requirements
150
120
Scheduled receipt
230
Projected on-hand inventory (37)
Planned receipt
Planned order release
117
117
117
Uncertain future order
Perishable goods 3
150
120 3
150
120

9. Material Requirement Planning (MRP) Master Production Schedule
Customer Order
Forecast
Master Production Schedule
(MPS)
Inventory
Records
MRP
Explosion
Bill of
Material
Material Requirement Planning
(MRP)

10. Material Requirement Planning (MRP)
Example A C B D D 2 F
Week No. 1 2 3 4 5 6
Gross requirements of A 80
Gross requirements of C 50

11. Material Requirement Planning (MRP)
For A (LT = 1 wk; lot for lot)
Week No. 1 2 3 4 5 6
Gross requirements
Scheduled receipt
Projected on-hand inventory
Planned receipt
Planned order release 80 80 80
For C (LT = 1 wk; lot for lot)
Week No. 1 2 3 4 5 6
Gross requirements
Scheduled receipt
Projected on-hand inventory
Planned receipt
Planned order release 50 50 50

12. Material Requirement Planning (MRP)
For D (LT = 2 wks; lot size = 100)
Week No. 1 2 3 4 5 6
Gross requirements
Scheduled receipt 50
Projected on-hand inventory (15)
Planned receipt
Planned order release
Week No. 1 2 3 4 5 6
Gross requirements
Scheduled receipt 50
Projected on-hand inventory (15) 65 85
Planned receipt
100
Planned order release 80
100

13. Manufacturing Resource Planning (MRPII) Master Production Schedule
Customer Order
Forecast
Master Production Schedule
(MPS)
Inventory
Records
MRP
Explosion
Bill of
Material
Material Requirement Planning (MRP)
Financial Data
Manufacturing Resource Planning (MRPII)
Purchasing
Reports
Financial
Reports
Marketing
Reports
HRM
Reports
Manufacturing
Reports

14. Enterprise Resource Planning (ERP)