Slide 3

It was around 1960, when manufacturers thought there is need of some kind of software which
will make them flexible with customer demand and avoid issue involved in material ordering,
delivery etc. So EOQ model was developed. EOQ just tells u most economical no of units per
order. Disadvantage was it assumes steady demand over year and does not account for seasonal
or economic changes.
While MRP is procedure for planning and controlling raw material, purchased parts and WIP inventories
required in manufacturing a product. It takes into account the demand variations both from forecast and
actual placed orders.
How MRP II is different from MRP I is we are going to see later on.

Slide 4
Economic Order Quantity

Slide 5
Material requirements planning (MRP) is a computer-based, time-phased system for planning
and controlling the production and inventory function of a firm from the purchase of materials
to the shipment of finished goods. All MRP systems are computer based since the detail involved
and the inherent burden of computation make manual use prohibitive. The main theme of MRP
is getting the right materials to the right place at the right time.

Slide 6

A system used for production planning and inventory control, with an information
feedback feature that enables plans to be checked and adjusted. The system feeds
back information about completed manufacture and materials on hand into the MRP
system, so that these plans can be adjusted according to capacity and other
requirements. The system is called a closed loop MRP because of its feedback feature,
which is also referred to as closing the loop."
Slide 8
It is extension of MRP. It takes MRP output- material requirements and schedules supply to
meet demand.
MRP systems use four pieces of information to determine what material should be ordered and
when. The master schedule and bill of materials indicate what materials should be ordered; the
master schedule, production cycle times and lead times then jointly determine when orders
should be placed.
So The main theme of MRP is getting the right materials to the right place at the right time.
What MRP II does is once u get right material at right place and right time, what to do next ie
scheduling.
While MRP allows for the coordination of raw materials purchasing, MRPII facilitates the
development of a detailed production schedule that accounts for machine and labor capacity,
scheduling the production runs according to the arrival of materials. An
MRPII output is a final labor and machine schedule. Data about the cost of production,
including machine time, labor time and materials used, as well as final production numbers, is
provided from the MRPII system to accounting and finance. When finance knows which items
will be purchased and when products will be delivered, it can accurately project the firm's cash
flows. In addition, personnel can project hiring or layoff requirements, while marketing can
keep track of up-to-the-minute changes in delivery times, lead times, and so on.

Slide 12
Aggregate planning:

It is a planning for next 6-18 months in which production, inventory and capacity are taken due care for
planning . By varying inventories and manpower we can achieve monthly targets. It uses forecast,
capacity, inventory files as input
CAPACITY REQUIREMENT PLANNING.
MRP does not consider capacity and often plans production which is not possible.
So CRP takes care of it and plans order from MRP and release as per capacity to full fill the
schedule. CRP consider many factors while planning like man power,m/c tool , internal material
handling time etc.
CRP compares the i/o and o/p for a work centre andcompare it with standard and control
the workcentre.
SHOP FLOOR CONTROL
The sfc monitors all activities and communicates status information on manufacturing orders
and work centre back to respective managers.
SFC determines what orders are released ,when and their routing,
when operation to be started and finished.
It also maintain all paper work of order and reacts to changes in schedule if priority changes.
It also interacts with CRP component and provide i/o and o/p data for capacity planning purpose
Slide13
Time phased scheduling means: Parts and components must be ordered in advance to accommodate
lead times between order placement and receipt. It sets a top level priorities for what will
be manufactured and when, looking at the material and production cycle. It takes into account
capacity and forecast to prepare it.

Slide 19

It shows record for all components of an item. Parts that go into parent item are called
level 1 components and so on. So MRP collects how much time is going to need to
manufacture and how many parts are required this information to schedule quantity
items in a order and time of order.

Slide 27
Typically MRP II is implemented in phases allowing for a period of proving the system will work
before going further. A first phase can include inventory, purchasing and accounting. Another
phase can include material requirements planning, customer order entry and shop floor control.
Each module requires data and information that may be created in a system for the first time so
care must be taken with how information is defined and kept up to date.