Meaning of MRP terms

Discuss the meaning of MRP terms such as planned order release and scheduled order receipt.

Each and every item in a company needs its Material Requirement Planning or MRP record to be kept. It records item information like the planned order receipts, net requirements, scheduled receipts, gross requirements projected available balance.

A planned order release related to the release of planned replenishment orders by the material planner.

Scheduled order receipts on the other hand are planned receipt of replenishment orders which are recorded at the starting time.

Many practitioners currently update MRP weekly or biweekly. Would it be more valuable if it were updated daily? Discuss.

In my opinion MRP should be updated on weekly or biweekly basis. The reason is that the performance of operations may have natural variations on daily basis that can be averaged in weeks or more time periods to get an overall idea of the operation performance. If it is done on daily basis, the result may be an exception report and a normal variation could be termed as an abnormal one.

One unit of A is made of three units of B, one unit of C, and two units of D. B is composed of two units of E and one unit of D. C is made of one unit of B and two units of E. E is made of one unit of F.

Items B, C, E, and F have one-week lead times; A and D have lead times of two weeks. Assume that lot-for-lot (L4L) lot sizing is used for Items A, B, and F; lots of size 50, 50, and 200 are used for Items C, D, and E, respectively.

 Items C, E, and F have onhand (beginning) inventories of 10, 50, and 150, respectively; all other items have zero beginning inventory. We are scheduled to receive 10 units of A in Week 2, 50 units of E in Week 1, and also 50 units of F in Week 1.

There are no other scheduled receipts. If 30 units of A are required in Week 8, use the low-level-coded bill-of-materials to find the necessary planned order releases for all components.

Bill of material record consist of the material required in the production of final product.  While Master Production Schedule record the amount of quantity of each item and the time it would be required.

This table summarizes the information in the given situation:

Item	Lead Time	On hand Inventory	Lot Sizing Rule	Schedule Receipts
A	2	0	L4L	10-W2
B	1	0	L4L	–
C	1	10	50	–
D	2	0	50	–
E	1	50	200	50-W1
F	1	150	L4L	50-W1

 

 

For 30 units A in Week 8 the MRP schedule with low level coded bill of materials:

Item A LT = 2 weeks	1	2	3	4	5	6	7	8
Gross Requirements								30
Scheduled Receipts		10
Projected Available balance		10	10	10	10	10		10
Net Requirements								20
Planned order receipt								20
Planned order release						20

 

Item A LT = 1 week	1	2	3	4	5	6	7	8
Gross Requirements						20
Scheduled Receipts
Projected Available balance	10	10	10	10	10	10
Net Requirements						10
Planned order receipt						50
Planned order release					50

 

Item B LT = 1 week	1	2	3	4	5	6	7	8
Gross Requirements					50	60
Scheduled Receipts
Projected Available balance
Net Requirements					50	60
Planned order receipt					50	60
Planned order release				50	60

 

Item E LT = 1 week	1	2	3	4	5	6	7	8
Gross Requirements					100	120
Scheduled Receipts	50
Projected Available balance	50	100	100	100	50
Net Requirements					70
Planned order receipt					200
Planned order release				200

 

Item D LT = 1 week	1	2	3	4	5	6	7	8
Gross Requirements						60	40
Scheduled Receipts
Projected Available balance						0	50
Net Requirements						60	0
Planned order receipt						150	0
Planned order release				150

 

Item F LT = 1 week	1	2	3	4	5	6	7	8
Gross Requirements				200
Scheduled Receipts	50
Projected Available balance	150	200	200	200
Net Requirements				0
Planned order receipt				0
Planned order release			200