Model Answer
0 min readIntroduction
Material Requirements Planning (MRP) is a computer-based inventory management system designed to ensure materials are available as needed for production and to keep inventory levels as low as possible. It’s a crucial component of supply chain management, particularly in manufacturing environments. The core of MRP lies in taking the Master Production Schedule (MPS) – a plan for the quantity of finished goods to be produced – and ‘exploding’ it into the requirements for raw materials, components, and subassemblies. This process considers the Bill of Materials (BOM) which defines the structure of the finished product and the lead times required to procure or manufacture each item. Accurately determining the schedule of gross requirements is fundamental to effective production planning.
Understanding the Problem & Assumptions
The question asks for the schedule of gross requirements for part C, given an MPS. To answer this, we need the following information, which is assumed to be provided in the "table above" (which is missing from the prompt, so we will create a sample table for demonstration purposes). We will also assume a lead time for part C. Without the actual MPS and lead time, a precise answer is impossible. We will proceed with a hypothetical example.
Hypothetical Data
Let's assume the following:
- MPS for Finished Product:
Period Quantity 1 50 2 80 3 60 - Bill of Materials (BOM): 1 unit of Finished Product requires 2 units of Part C.
- Lead Time for Part C: 1 period.
Calculating Gross Requirements for Part C
The gross requirements for Part C are calculated by multiplying the MPS quantity for the finished product by the BOM quantity for Part C. However, due to the lead time, we need to shift the requirements back in time. This is known as 'explosion'.
Here's the calculation:
- Period 1: MPS (Period 1) * BOM = 50 * 2 = 100 units of Part C required in Period 1.
- Period 2: MPS (Period 2) * BOM = 80 * 2 = 160 units of Part C required in Period 2.
- Period 3: MPS (Period 3) * BOM = 60 * 2 = 120 units of Part C required in Period 3.
Considering the lead time of 1 period, the gross requirements are:
| Period | Gross Requirements for Part C |
|---|---|
| 1 | 100 |
| 2 | 160 |
| 3 | 120 |
Explanation of the Process
The process of determining gross requirements involves backward scheduling. The demand in each period for the finished product is translated into demand for component C, taking into account the time it takes to procure or manufacture component C (the lead time). This ensures that component C is available when needed for production of the finished product. Without knowing the actual MPS and lead time, this is the general methodology that would be applied.
Potential Complications
In a real-world scenario, several factors could complicate this calculation:
- Inventory on Hand: Existing inventory of Part C would reduce the gross requirements.
- Scheduled Receipts: Orders for Part C already placed but not yet received would also reduce the gross requirements.
- Firm Planned Orders: Planned orders that have been committed would need to be considered.
- Multiple Levels in the BOM: If Part C requires its own components, the process would need to be repeated for those components.
Conclusion
In conclusion, the schedule of gross requirements for Part C is derived by exploding the MPS for the finished product through the BOM, adjusted for the lead time of Part C. The hypothetical example demonstrates this process, resulting in a schedule showing the quantity of Part C needed in each period. A complete and accurate answer requires the actual MPS data and the lead time for Part C. Effective MRP relies on accurate data and careful consideration of all relevant factors, including inventory levels and scheduled receipts.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.