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33 Cards in this Set
- Front
- Back
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Independent demand
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Demand for the item is independent of demand for any other item in inventory
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How is independent demand know
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Originates with customer and it is forecasted
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Dependent demand
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Demand for the item is dependent upon the demand for some other item in inventory
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How is dependent demand known
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Component of finish product, calculated
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Aggregate planning process
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Master production schedule then material requirements plan
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MPS stands for
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Master production schedule
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What is MPS
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And anticipated build schedule, must be in accordance with aggregate production plan, inputs from financial plans, customer demands, engineering, supplier performance, Each step must be tested for feasibility. The result of production planning process. Established in terms of specific end items. Must allow for a reasonable length of time often fixed or frozen in near-term part of plan. Rolling schedule. As a statement of what is to be produced not forecast of demand
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Master production schedule can be expressed in any of the following terms
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Customer order or make to order. Modules or assembled to order. And item or make to stock
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What technique is used to establish a schedule for dependent demand item
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MRP
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Objectives of MRP
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To determine material requirements, to keep priorities current
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To determine materials requirements means
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What is required, how much is required, when is it required
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To keep priorities current means
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React to changes in supply and demand. Expedite deexpedite add cancel or change plan orders
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Benefits of MRP
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Better response to customer orders. Faster response to market changes. Improve utilization and facilities in labor. Reduce inventory levels
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Required inputs of MRP
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Master production schedule. Specifications or bill of materials, inventory availability, purchase orders outstanding, leadtimes
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Bill of materials
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List of ingredients components and materials to make the product. Provides product structure
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Accurate inventory records
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Required for MRP to operate correctly, Generally need 99% accuracy
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Purchase orders outstanding
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Must be accurately reflect quantities and schedule receipts. Also known as open orders. By product of well managed purchasing in inventory control departments
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Lead time for components
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Time required to purchase produce or assemble an item
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Offsetting
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Time phasing step of determining gross requirements
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Explosion
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Continuation process through entire BOM one level at a time as a part of determining gross requirements
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Netting
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Gross to net calculation be third basic function of MRP process
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MRP dynamics
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Facilitates replanning when changes occur, system nervousness, time fences, pegging
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System nervousness
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Result of too many changes in MRP management
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Time defenses
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Put a limit on replanning
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Pegging
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Links each item to its parent following effective analysis of changes
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MRP limitations
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Does not do detailed scheduling plans, works best in product focused or repetitive environments, requires fixed the lead time and infinite size time bucket
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Lot for lot
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Technique orders just what is required for production based on netting requirements
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Disadvantages of a lot for lot
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May not be feasible, set up costs are high
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Economic order quantity or EOQ
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Expects a known constant demanding and MRP systems often deal with unknown and variable demand
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Periodic order quantity or POQ
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Order quantity needed for predetermined time.
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When should lot size be computed?
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Anytime there is a change
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Problem with changing lot sizing
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Results and system nervousness
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When should a lot for lot be used
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When low set of costs can be achieved
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