Computation Section
Materials Requirement Planning
 - Add MRP Sheet
MRP requires a complicated accounting form relating the demand for the finished goods and the schedule for production of the several parts of the process and the raw material purchases. The structural information is entered by selecting the Add MRP Sheet item from the OMIE menu. The following dialog is presented. Definitions of the quantities are in the table below.
Problem Name This becomes the name of the worksheet and the prefix to a number of ranges on the worksheet. The name should be chosen carefully following the Excel rules for naming regions and worksheets. Once chosen it cannot be changed.
Time Horizon The number of periods to be considered by the analysis. The meaning of a time period, day, week or month, is the choice of the analyst. Again the number of periods cannot be changed.
Number of MPS This is the number of finished goods to be scheduled. This number can be changed with the Change MRP command.
Number of Parts This is the number of parts to be entered. Here we use the total number of parts in the process. The data could be entered as one or a few parts at a time. New parts are added at the bottom of the current worksheet.
Interest Rate per Period This is an interest rate used for time value of money calculations. It is used to compute the cost of holding inventory for one period.
Lot Size This is a selection of the method for computing the lot size for the parts. The four alternatives are: LFL, lot of lot, FOP, fixed order period, FOQ, fixed order quantity and WW, Wagner Whiten optimum policy. All parts entered will be assigned this method but the method may be changed by changing a cell on the worksheet.
Periods The default value for the number of periods for the FOP method.
Quantity The default value for the lot size quantity for the FOQ method.
Setup Cost The default value of the cost of setting up the production process for a manufactured part or to place an order for a purchased part. It may be changed on the worksheet.
Lead Time The default value of the lead time for producing or ordering a part. It may be changed on the worksheet.
Number in BOM This is the number of rows allowed for the Bill of Materials for a part. It affects the worksheet and cannot be changed for a particular part. Parts may be entered one at a time to provide different numbers of BOM.
Initial Inventory The default value of the initial inventory for a part. It may be changed on the worksheet.
Pressing the OK button will construct the worksheet describing the process. The figure below shows the worksheet ready to receive the problem specific data.
Several columns of the display have been made narrow to make the picture smaller. Only the first of the 12 parts is shown. Details for the other parts appear below this one on the worksheet. The white areas on the worksheet may be changed, but the yellow areas, shown in gray in the picture, contain formulas which should not be changed by the user.

The columns on the right of the display are used to compute the EOQ, economic order quantity, and EOP, economic order period for the parts. The cells will have values once data is entered.


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tree roots

Operations Management / Industrial Engineering
by Paul A. Jensen
Copyright 2004 - All rights reserved

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