MRP and Dependent Inventory Models

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MRP and Dependent Inventory Models
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Inventory Classifications
Inventory
Process stage
Demand Type
Number Value
Other
Raw Material WIP Finished Goods
A Items B Items C Items
Maintenance Dependent Operating
Independent Dependent
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Dependent versus Independent Demand
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Inputs to the Production Plan
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Bill-of-Material Product Structure Tree
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Time-Phased Product Structure
Must have D and E completed here so production
can begin on B
Start production of D
1 week
2 weeks to produce
2 weeks
1 week
2 weeks
1 week
2 weeks
3 weeks
1 week
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MRP Requirements

• Mainly discrete products
• Accurate bill-of-material
• Accurate inventory status
• 99 inventory accuracy
• Stable lead times

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Structure of the MRP System
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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

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Lot-Sizing Techniques

• Lot-for-lot
• Economic Order Quantity
• Part Period Balancing
• Wagner-Whitin Algorithm

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Extensions of MRP

• Closed loop MRP
• MRP II - Material Resource Planning
• Enterprise Resource Planning

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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.

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The MRP Woorksheet

• Usually computerized
• Understanding provides for problem solution
• Relationship to cycle counts

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Definitions