MRP Computer Program
The MRP program operates on the inventory file, the MPS. and the BOM file. It works as follows: A list of end items needed by time periods (or time "buckets") is specified by the MPS. A description of the materials and parts needed to make each item is specified in the 80M file. The number of units of each item and material currently on hand and on order are contained in the inventory file. The MRP program "works" on the inventory tile (which is segmented into time periods), while continually referring to the 80M file to compute the quantities of each item needed. The number of units of each item required is then adjusted for on-hand amounts and amounts previously ordered; the net requirements are then "offset" (setback in time) to allow for the lead time needed to obtain the material and/or to make the items. If t e MRP program being used does not consider capacity constraints. the master scheduler must manually perform some capacity balancing. Through an iterative process. the master scheduler feeds a tentative MPS into the MRP program (along with other items requiring the same resources) and the output is examined for production feasibility. The MPS is then adjusted to try to correct any imbalances, and the program is executed again.This process is repeated until the output is acceptable. Although it would seem to be a simple matter to have the computer simulate various schedules that take into consideration resource limitations, in reality it is usually a very large and very time-consuming problem. To further complicate the problem today, there is often not one MPS but a number of them. Firms will frequently divide the scheduling work among the schedules by assigning one master schedule for each major product line. As a result, each master scheduler must compete for limited resources for his or her own product line. As a group, however, they are trying to balance resource usage and due dates for the production system a, a whole.
Because the MRP program has access to the 80M file, the MPS. and the inventory records file, outputs or reports can take on an almost unlimited range of format and content. These reports are usually classified as primary and secondary output reports. (With the expansion of MRP into MRP II, many additional reports are available.)
Primary Reports Primary reports are the main or normal reports used for inventory and production control. These reports include
I. 'Planned orders to be released at a future time.
2. Order release notices to execute the planned orders.
3. Changes in due dates of open orders due to rescheduling.
4. Cancellations or suspensions of open orders due to cancellation or suspension of orders on the MPS.
5. Inventory status data
Secondary Reports Additional reports, which are optional in an MRP program. fall into the following main categories:
I. Planning reports to be used.for example. in forecasting inventory and requirements over some future time horizon.
2. Performance reports for purposes of pointing out inactive items and is the agreement between actual and programmed item lead times and between and programmed quantity usage and costs, Performance reports for purposes of pointing out inactive items and the agreement between actual and programmed item lead times and between acts and programmed quantity usage and costs,
3. Exceptions reports that point out serious discrepancies, such as errors. out-or-r.mge situations, late or overdue orders, excessive scrap. or nonexistent parts. Exceptions reports that point out serious discrepancies, such as errors. out-or-r.mge situations, late or overdue orders, excessive scrap. or nonexistent parts.
A Simple MRP Example
To demonstrate how the various element. of an MRP y. tern are integrated. e present a simple problem to demon .trate how quantities arc calculated. lead times are offset, and order releases and receipts are established,
Bill of Materials (Product Structure Tree) File
Suppose that we want to produce Product T. which consists of two parts U. three parts V, and one part Y. Part U. in turn. is made of one part Wand two parts X. Part V is made of two parts Wand two part Y. Exhibit 17. tl shows the product structure tree for Product T.
Inventory Records File
Next, we need to consider the lead times needed to obtain these items, that is. either to produce the parts internally or to obtain them from an outside vendor. Assume that the lead time to make the part and their respective on-hand inventories and scheduled receipts are as follows: