1. MATERIALS REQUIREMENT PLANNING (MRP) MRP IS A SYSTEM OF PLANNING AND SCHEDULING THE TIME- PHASED MATERIALS REQUIREMENT FOR PRODUCTION OPERATIONS. PROACTIVE WHAT WILL I NEED IN THE FUTURE? WHAT WILL I NEED IN THE FUTURE? HOW MUCH AND WHEN HOW MUCH AND WHEN OPPOSING REACTIVE WHAT SHOULD I DO NOW WHAT SHOULD I DO NOW

2. MATERIALS REQUIREMENT PLANNING (MRP) OBJECTIVES 1)INVENTORY REDUCTION 2)REDUCTION IN PRODUCTION & DELIVERY LEAD TIME 3)REALISTIC COMMITMENT 4)INCREASED EFFICIENCY (COORDINATION AMONG VARIOUS WORK CENTERS) MRP SYSTEM MASTER PRODUCTION SCHEDULE (MPS) 1.MASTER PRODUCTION SCHEDULE (MPS) Input to MRPInput to MRP Identifies the Quantity of Each End ProductIdentifies the Quantity of Each End Product When It is UsedWhen It is Used

3. MRP SYSTEM (Cont.) 2.BILL OF MATERIALS (BOM)  How Each End Product is Manufactured  Product Structure  Specification of Subcomponents, Sequence of Buildup, Quantity in Each Finished Units  Demand Dependency AD BC 2C B FE End products Components End Products Components

4. MRP SYSTEM (Cont.) 3.INVENTORY STATUS FILE Up-to-date File of the Inventory Status of Each Item in Product Structure, (e.g., Id. Number, Lead Time, Safety Stock, Reserve, etc.)Up-to-date File of the Inventory Status of Each Item in Product Structure, (e.g., Id. Number, Lead Time, Safety Stock, Reserve, etc.) 4.MRP PROCESSING LOGIC Items Required (Gross Requirement)Items Required (Gross Requirement) How Many from Inventory are AvailableHow Many from Inventory are Available Net Quantity Planned (Planned Order Receipts)Net Quantity Planned (Planned Order Receipts) Order for the New Shipment (Planned Order Release)Order for the New Shipment (Planned Order Release)

5. MRP PLANNING SYSTEM Legends: MPS: Master Production Schedule ISF: Inventory Status File BOM: Bill of Materials MPS ISF MRPBOM ORDER RELEASE REQUIREMENT ORDER RESCHEDULING (EXPEDITE, DEEXPEDITE, CANCEL) PLANNED ORDER (FUTURE)

6. MANAGEMENT INFORMATION FROM MRP Management Information WEEK12345678 GROSS REQUIREMENT 400500 SCHEDULED RECEIPTS AVAILABLE FOR NEXT PERIOD 50505050 NET REQUIREMENTS 350500 PLANNED ORDER RECEIPTS 350500 PLANNED ORDER RELEASES 350500 ITEM IDENTIFICATION: # 3201 – MOUNTING BRACKET LEAD TIME: 3 WEEKS ON HAND: 100 SAFETY STOCK: 50