Production and Operations Management Lesson 07 - Material Requirements Planning

To ensure good master scheduling, the master scheduler (the human being) must

-Include all demands from product sales, warehouse replenishment, spares, and interplant requirements. -Never lose sight of the aggregate plan. -Be involved with customer order promising. -Be visible to all levels of management. -Objectively trade off manufacturing, marketing, and engineering conflicts. -Identify and communicate all problems.

Available to promise

A feature of MRP systems that identifies the difference between the number of units currently included in the master schedule and the actual (firm) customer orders.

Assemble-to-order

A final assembly is made from standard options that the customer chooses. Examples: trucks, generators, motors.

Low-Level Coding

If all identical parts occur at the same level for each end product, the total number of parts and materials needed for a product can be computed easily.

Process

Includes industries such as foundries, rubber and plastics, specialty paper, chemicals, paint, drug, food processors.

Engineer-to-order

Items are fabricated or assembled completely to customer specification. Examples: turbine generators, heavy machine tools.

Assemble-to-stock

Items are manufactured by machine rather than assembled from parts. These are standard stock items carried in anticipation of customer demand. Examples: piston rings, electrical switches.

Make-to-order

Items are manufactured by machine to customer order. These are generally industrial orders. Examples: bearings, gears, fasteners.

Net change systems

MRP systems that calculate the impact of a change in the MRP data (the inventory status, BOM, or master schedule) immediately.

Bill-of-materials (BOM)

The complete product description, listing the materials, parts, and components; the quantity of each item; and also the sequence in which the product is created.

Material requirements planning (MRP)

The logic for determining the number of parts, components, and materials needed to produce a product

(EOQ)

economic order quantity

Master Production Schedule

is the time-phased plan specifying how many of each end item the firm plans to build and when.

(LTC)

least total cost

(LUC)

least unit cost

(L4L)

lot-for-lot