Computation Section
Materials Requirement Planning
 -Information Required
To complete the MRP analysis, problem specific data is required. This is entered on the MRP worksheet. The table below, called the master production schedule (MPS), shows the production requirements for the three products for the next 12 periods, weeks, in this case. The demands for the finished goods may be determined from actual orders or through forecasts.
The table below shows data required for each part. The first column is the part number or name. The second column is the current on hand inventory. The third column describes the inventory replenishment policy, called the lot sizing policy. The column labeled Policy Parameter shows the parameter for the lot sizing policy. Its meaning is different for the various policies. No parameter is required for LFL or WW. The Lead Time is the time required between when an order for the part is released to the shop and when it will be received. The Cost Added is the the direct cost expended to purchase or manufacture one unit of the part. Only the raw materials have costs for the example. The last column designates the setup cost for a production run for the part.

For each part, we must also specify the scheduled receipts for each period in the time horizon. These indicate the amounts that will arrive due to orders placed at an earlier time. For the example we assume that there are no scheduled receipts.

The following lot sizing policies are allowed.



Policy Definition
LFL Lot for lot Deliver in each period the amount required
FOP Fixed order period When a delivery is required deliver the amount required for the next m periods, where m is a parameter of the policy.
FOQ Fixed order quantity When a delivery is required deliver the amount Q, where Q is a parameter of the policy. If the current requirement exceeds Q deliver the amount of the current requirement.
WW Wagner-Whiten Determine the optimum production schedule that minimizes the sum of the setup plus inventory costs for the time horizon.
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Operations Management / Industrial Engineering
by Paul A. Jensen
Copyright 2004 - All rights reserved

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