1. MRP and Dependent Inventory Models

2. Inventory Process stage Demand Type Number & Value Other Raw Material WIP Finished Goods Independent Dependent A Items B Items C Items Maintenance Dependent Operating Inventory Classifications

3. Item Materials With Independent Demand Materials With Dependent Demand Demand Source Company CustomersParent Items Material Type Finished GoodsWIP & Raw Materials Method of Estimating Demand Forecast & Booked Customer Orders Calculated Planning Method EOQ & ROPMRP Dependent versus Independent Demand

5. Inputs to the Production Plan Production Plan Marketing Customer Demand Engineering Design Completion Management Return on Investment Capital Human Resources Manpower Planning Procurement Supplier Performance Finance Cash Flow Production Capacity Inventory

6. Bicycle(1) P/N 1000 Handle Bars (1) P/N 1001 Frame Assy (1) P/N 1002 Wheels (2) P/N 1003 Frame (1) P/N 1004 Bill-of-Material Product Structure Tree

7. Time-Phased Product Structure 1 2345678 D G F E C E D B A 2 weeks 1 week 3 weeks 2 weeks 1 week 2 weeks 1 week 2 weeks to produce Start production of D Must have D and E completed here so production can begin on B

8. Mainly discrete products Accurate bill-of-material Accurate inventory status – 99% inventory accuracy Stable lead times MRP Requirements

9. Structure of the MRP System MRP by period report MRP by date report Planned orders report Purchase requirements Exception reports MRP Programs Master Production Schedule BOM Lead Times (Item Master File) (Bill-of-Material) Inventory Data Purchasing data

10. MRP and JIT MRP - a planning and scheduling technique with fixed lead times JIT - a way to move material expeditiously Integrating the two: – Small bucket approach and back flushing – balanced flow approach

11. Lot-Sizing Techniques Lot-for-lot Economic Order Quantity Part Period Balancing Wagner-Whitin Algorithm

12. Extensions of MRP Closed loop MRP MRP II - Material Resource Planning Enterprise Resource Planning

13. MRP in Services Can be used when demand for service or service items is directly related to or derived from demand for other services – restaurant - rolls required for each meal – hospitals - implements for surgery – etc.

14. The MRP Woorksheet Usually computerized Understanding provides for problem solution Relationship to cycle counts

15. Definitions