INTRODUCTION TO MRP

MRP begins with the principle that many materials held in the inventory have dependent demand. Dependent demand item are those products with subassemblies and component. Hence ,MRP is a technique for determining the quantity and timing for acquisition of dependent item needed to satisfy MSR

Master production schedule

It is a plan for future production of end items over a short range planning horizon that usually spans form one week to several months End items are finished product MPS sets the quantity of each end item to be completed in each week of the short-range planning horizon.

What is MRP?
MRP is a computer based system that takes the MPS as given; takes the details of the required amount of raw-materials,parts; reduce these material requirements to account for materials that are in inventory or on order and develops a schedule of orders for purchased materials and produce parts over planning horizon.

 In fixed order qty ,orders for a raw material remains in inventory until the raw materials end item appears in the MPS. In MRP,orders of raw material are timed to arrive at the time that the raw materials end item appears in the MPS. Thereby the impact of MRP on raw material inventory level is therefore reduced average inventory level.

MRP RESULTS IN ..
Reduced number of stockouts and material delivery delays result in more production without increase in the number of employees and machine Reduction of the incidence of scrapped subassemblies,assemblies and product resulting from the use of incorrect parts. Capacity of production dept is increased.

ELEMENTS OF MRP
1. MPS 2. BILLS OF MATERIAL(BOM) 3. INVENTORY STATUS FILE

PROCESS
MPS drives the entire MRP system. The inventory status file and bill of material file supply additional information abt prdts in the MPS. These inputs are fed into the MRP computer program,which generate output. The inventory transactions resulting from the MRP actions are put back into the inventory status file so that current inventory records are maintained .

MRP SYSTEM
Data Files Output Reports BOM
MRP by period report

Lead times
(Item master file)

MRP by date report Planned order report

Inventory data

Purchasing data

Material requirement planning programs (computer and software)

Purchase advice

Exception reports Order early or late or not needed Order quantity too small or too large

Outputs of MRP
1. 2. 3. 4. 5. Planned order schedule Change in planned order Exception report Performance reports Planning reports

Objective & Benefits

To improve customer To reduce inventory investment. To improve plant operating efficiency

1. Better response to customer orders

2. Faster response to market changes 3. Improved utilization of facilities and labor 4. Reduced inventory levels