Material requirements planning (MRP) is a computerized inventory control system for calculating the materials demand, monitoring the requirement dates, and developing work orders or purchase orders that consider the lead time required to produce the materials in-house or acquire them from the outside suppliers.

Objectives of Material Requirements Planning
1. To make sure materials are available when needed
2. To maintain the lowest possible level of inventory

MRP Inputs
1. The master production schedule (MPS) indicates what finished products are needed, how much are required, and when they should be ready.
2. The product structure file contains a bill of materials (BOM) for every item produced. The bill of materials (BOM) itemizes the component parts that are incorporated in the products, describes the characteristics of each part, and specifies when and in what quantity each part is required in the production process.
3. The inventory master file is a database of every item produced, ordered, or inventoried.
* Covers such data as on-hand quantities, on-order quantities, lot sizes, safety stocks, lead time, and part usage data.
* The inventory master file is updated whenever there are changes in the inventory data.

MRP Outputs
• Purchase orders, work orders, and other reports
• Action notices or rescheduling notices suggest changes in previous plans or existing schedules.
Three Inputs to CRP
1. The MRP planned order releases
2. A routing file which describes the production equipment, the process sequence, and the duration of each operation
3. An open orders file contains information on the pending job orders.

CRP produces a load profile for each machine or work center in the shop.

A load profile compares released orders and planned orders with work center capacity.

Utilization is the percentage of available working time that a worker spends working or a machine uses.

Efficiency is how well a worker or an...

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