Transcript Slide 1
Operations Management MRP Lecture 22 (Chapter 14) 1 Dependent versus Independent Demand Item Demand Source Material Type Method of Estimating Demand Planning Method Materials With Independent Demand Materials With Dependent Demand Company Customers Parent Items Finished Goods WIP & Raw Materials Forecast & Booked Customer Orders Calculated EOQ & ROP MRP 2 Plans and their relationship HIGH SHORT TERM SCHEDULING MRP MPS APP LOW SHORT MEDIUM TIME FRAME APP = Aggregate Production Planning: 3 – 18 months (medium/intermediate term) MPS = Master Production Schedule: 1 – 12 weeks MRP = Material Requirements Planning: Daily or weekly (short term) Short term scheduling: hourly (very short). LONG 3 MRP Dependent demand technique that uses MPS, BOM, inventory, expected receipts and lead times to determine materials requirements Basis for ERP More preferable to EOQ models if relationship is known between items i.e. dependency occurs for the items under consideration Precisely determines feasibility of a schedule within capacity constraints 4 Dependent Inventory Model (MRP) Requirements MPS (what is to be made and when) Specifications or Bill of Materials (BOM) Inventory availability (what is in stock) PO’s outstanding (what is on order) Lead times (how long it takes to get various components) 5 Master Production Schedule (MPS) Timetable that specifies what is to be made and when Result of Aggregate/Production Planning process Disaggregates the AP (expressed in gross terms) into specific terms AP sets upper and lower bounds on the MPS 6 Aggregate Production Plan Months January Aggregate Production Plan shows the total Weeks February 1,500 quantity of bicycles 1 2 MPS 3 1,200 4 5 6 7 8 Master Production Schedule Shows the specific type and quantity of bike to be produced Road bike Hybrid bike Mountain bike 100 100 500 100 500 300 100 450 450 100 7 Typical Focus of the Master Production Schedule Make to Order (Process Focus) Number of end items Typical focus of the master production schedule Number of inputs Schedule orders Assemble to Order or Forecast (Repetitive) Stock to Forecast (Product Focus) Schedule finished product Schedule modules Motorcycles, autos, Examples: Print shop Machine shop TVs, fast-food Fine dining restaurant restaurant Steel, Beer, Bread Light bulbs, Paper 8 Bill of Materials (BOM) Listing of components, their description and qty of each, required to make one unit of a product Due to rush to get product into market, BOM may be incomplete or non-existent Adequate to provide product structure and explode it to reveal requirements Low level coding done for items occurring at several levels 9 Bill Of Material Product Structure Tree Bicycle (1) P/N 1000 Handle Bars (1) P/N 1001 Frame Assembly (1) P/N 1002 Wheels (2) P/N 1003 Frame (1) P/N 1004 10 Purchase Orders Outstanding By-product of well managed purchasing and inventory control depts Prodn personnel should be well-informed about the orders placed and their scheduled deliveries 11 Lead times Time reqd to acquire (purchase, produce or assemble) an item For manufactured item, lead time = move time + setup time + assembly/run time For purchased item lead time = time between order placement and order receipt 12 Time-Phased Product Structure Must have D and E completed here so production can begin on B Start production of D 1 week D 2 weeks to produce B 2 weeks E A 2 weeks 2 weeks E 1 week 1 week G C 3 weeks F 1 week D 0 1 2 3 4 Time in weeks 5 6 7 13 Example 14 MRP – Inventory Record Item: B Description: Frame Lot Size: 1000 units Lead Time: 2 weeks assembly Week 1 2 3 Gross requirements 100 500 400 Scheduled receipts 1000 0 0 Projected on-hand inventory 4 500 0 5 100 0 6 7 150 450 0 0 8 200 0 115 Planned receipts Planned order releases 15 MRP – Planned Orders Item: B Description: Frame Lot Size: 1000 units Lead Time: 2 weeks assembly Week 1 2 3 Gross requirements 100 500 400 Scheduled receipts 1000 0 0 1015 515 115 Projected on-hand inventory 115 Planned receipts Planned order releases 4 500 0 615 5 6 7 150 450 0 0 0 0 515 365 915 715 100 1000 1000 8 200 1000 1000 16 MRP – Inventory Record Item: B Description: Frame Lot Size: 1000 units Lead Time: 2 weeks assembly Week 1 2 3 Gross requirements 100 500 400 Scheduled receipts 1000 0 0 Projected on-hand inventory 4 500 0 5 100 0 6 7 150 450 0 0 8 200 0 115 Planned receipts Planned order releases 17 MRP – Planned Orders Item: B Description: Frame Lot Size: 1000 units Lead Time: 2 weeks assembly Week 1 2 3 Gross requirements 100 500 400 Scheduled receipts 1000 0 0 1015 515 115 Projected on-hand inventory 115 Planned receipts Planned order releases 4 500 0 615 5 6 7 150 450 0 0 0 0 515 365 915 715 100 1000 1000 8 200 1000 1000 18 Structure of the MRP System Data Files BOM (Bill-of-Material) Master Production Schedule Lead Times (Item Master File) O/p reports MRP by period report MRP by date report MRP Programs Planned orders report Inventory Data Purchase requirements Purchasing data Exception reports 19 Lot-Sizing Techniques Techniques used in determining order qty’s or lot sizes Lot-for-lot Economic Order Quantity Part Period Balancing 20 Lot-for-lot Lot sizing technique that generates exactly what is needed No safety stock or anticipation of further orders Works most efficiently when Frequent orders are economical (low set-up or ordering costs) JIT inventory techniques has been implemented 21 EOQ Preferable when demand is relatively constant and independent Not preferable for dependent demand Operations managers should take advantage of demand info when it is available rather than assuming constant demand 22 PPB Dynamic approach that balances setup / ordering and holding costs by changing the lot size to reflect requirements of next lot size in the future Develops an EPP – ratio of setup to holding cost Adds requirements until the part periods/holding costs approximate EPP 23 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 – demand for vegetables is dependent on demand for meals hospitals – equipment, materials and supply dependent on demand for surgeries 24 MRP in services 25