1. Major Inputs to MRP Process: 1. Bill of Material
Product structure file
Determines which component items need to be scheduled
Product Structure Record
Clipboard
Level 0
Level 1
Level 2
Spring (1)
Bottom Clip (1)
Top Clip (1)
Pivot (1)
Rivets (2)
Clip Assembly (1)
Pressboard (1)

2. Bill of materials - BOM
In order to show the make-up (in terms of the parts needed for production) we have a Bill of Materials (BOM) for the end-product (namely the chair).
BOM is a listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly.

3. Structure of a BOM
The diagram illustrates a bill of material for product A. Product A is made of assembly B, components C and D, and material E. Assembly B is made from components F, G, and H (as well as other assemblies or products). Purchased parts are normally  identified as materials  (items E, F, and G) but can be any product, assembly or component that depending on workload you choose to buy-out or manufacture. This chart was found at the following website:

4. Processes that utilize a BOM
Production
Materials planning
Product costing
Plant maintenance
This is just a few of many different areas in business that use a BOM to organize their materials. This list was obtained from the following web site:

5. Types of BOMs Static (fixed) bill Example:
A bill of material for a part that is normally made from the same components, labor and raw materials.
Used for standard assemblies, components, and engineer-to-order customer orders.
Example:
A bill of materials for a standard chair
A static bill of materials is a fixed bill for standard assemblies. They use the same materials and components every time. An example of this is the building of a standard chair. The BOM would be the same every time so it would be a static bill of materials.

6. Types of BOMs Dynamic (parametric) bill Example:
A bill of material for a product or part for which size, color, laminate, and other options can be selected.
Example:
A bill of materials for a Dell computer
A dynamic bill can vary in the components that make up a product. An example of this type of BOM is for a Dell computer. For the most part the components are standard, but the customer can choose different features and so those parts will vary from project to project.

7. Types of BOMs Single level bill of material Example:
A bill of material that lists the materials, parts and labor required to make another part.
Example:
A bill of materials to make a Dell computer
A single level BOM lists the parts included in a single product like a Dell computer.

8. Single-level BOM

9. Types of BOMs Multilevel bill of material Example:
A bill of material that lists the components, assemblies, and materials required to make a part, the components, assemblies, and materials required to make each component and assembly of the part, and so forth.
Example:
A BOM for the battery inside the Dell computer.
To go deeper into a product, a multilevel BOM not only lists the parts of a product, but the parts of the components in the product. For example the BOM not only lists the parts in a Dell computer, but also the parts that are in the battery in the Dell computer. This information was found on the following website:

10. Product Structure Diagram P301 Computer

11. Product Structure Diagram P301 Computer (Continued)
b., c.
Item
Low-Level Code
Quantity Required for One Unit*
A – Arithmetic Board 2 1
B – Box Casing
C – Ram Chip 3 16
K – Keyboard Unit
M – Memory Board 4
P – Processor Unit
R – ROM Chip
S – Switch 9
V – Video Unit
X – Board Type X
Y – Board Type Y
Z - Microprocessor
*Assuming no inventory for any item

12. What information is on a BOM?
Quantity
Item ID#
Description of Item
Cost of Item
Total Project Cost
These five items are the most typical and important items on a BOM. Some examples provided later in the presentation do not follow this exact format because there is no standard format for a BOM. Each company needs to modify where needed to fit their individual needs. To illustrate a bill of materials, we will use the project of building a basic chair.

13. Quantity Tells user how many of each part is needed for each project
Example:
A chair needs 1 seat, 4 legs, 1 back, and 5 nails.
The quantity is one of the most important parts of the BOM because it tells us how many parts are needed for a project. The chair for example needs 1 seat, 4 legs, 1 back, and 5 nails to hold it together. The builder would not want to order 3 legs or forget to order the back on accident because the chair would not be finished correctly to order.

14. Item ID # Tells us which part to order Can be any of the following:
Catalog number, UPC, or any other identification number.
Example:
The chair needs a 2PC seat, 5DR legs, 6TU8 back, and 1 inch nails.
The item ID number tells us which type of part to buy. The numbers need to be exact for the correct part to be ordered. In our example the chair needs a specific type of seat, legs, back, and nails. The ID number can be a catalog number assigned by either the company or the vendor, or can be a type of UPC scan-able label.

15. Description of Item
Provides a check that the correct item is being ordered.
The description of the item is just a quick check to make sure all the parts were included. This way the user does not have to memorize each part by ID number. Instead, they can quickly scan the BOM and see that a seat, legs, back, and nails are included.

16. Cost of Item
Cost is included to show how much each part is per item and the total cost of all like parts.
Example:
The cost of a leg is $5 per leg. Then the total price of the legs ordered would be $20 because there are 4 legs.
The cost of the item lets the user know the cost per item. We can then figure out the cost for all like items. Because we only need 1 seat and 1 back, their cost for like items would be the same as the cost per item. The legs, however, have different costs because we are ordering more than one leg. In this example the legs are $5 each, so the total price of legs ordered are $20.

17. Total Project Cost
Shows the total cost of all items and is also the total cost of the direct materials used in the project.
Example:
Seat-$10, Back-$5, Leg-$5 per leg, Nail-$.5 per nail
Total Cost of a chair = *4 + .5*5 = $37.50
The total project cost may be included in some BOM to show the total cost of all the items being ordered. In our example, the total cost of the chair is $37.50.

18. BOM Example Quantity ID# Description Unit Price Total Cost
1 6TU8 Back $5/Unit $ 5.00
4 5DR Legs $5/Unit
1 2PC Seat $10/Unit
5 1” Nails $0.50/Unit
Total Project Cost $37.50
This is a sample BOM based on the examples provided in this tutorial