Essay on Material Requirement Plannin

2987 Words Apr 11th, 2015 12 Pages
IEOR 4000: Production Management


page 1

Professor Guillermo Gallego

Material Requirements Planning (MRP)

Material Requirements Planning (MRP) is a computer-based production planning and inventory control system. MRP is concerned with both production scheduling and inventory control. It is a material control system that attempts to keep adequate inventory levels to assure that required materials are available when needed. MRP is applicable in situations of multiple items with complex bills of materials. MRP is not useful for job shops or for continuous processes that are tightly linked.
The major objectives of an MRP system are to simultaneously:
1. Ensure the availability of materials, components, and products for
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MRP takes the master schedule for end items and translates it into individual time-phased component requirements.
The product structure records, also known as bill of material records (BOM), contain information on every item or assembly required to produce end items. Information on each item, such as part number, description, quantity per assembly, next higher assembly, lead times, and quantity per end item, must be available.
The inventory status records contain the status of all items in inventory, including on hand inventory and scheduled receipts. These records must be kept up to date, with each receipt, disbursement, or withdrawal documented to maintain record integrity.
MRP will determine from the master production schedule and the product structure records the gross component requirements; the gross component requirements will be reduced by the available inventory as indicated in the inventory status records.


MRP Computations

We will illustrate MRP computations through examples.
Example 1 Suppose you need to produce 100 units of product A eight week from now, where product A requires one unit of product B and two units of product C, while product C requires one unit of product D and two units of product E. How many units of each type do you need? In this example it is easy to compute the requirements of each item to produce 100 units of product A:
Req(B) = 100, Req(C) = 200, Req(D) = 200,

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