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Lecture Manufacturing planning and control for supply chain management (6/e) - Chapter 6a: Advanced MRP. This chapter presents the following content: Advanced MRP - Definition, determining order quantities, buffering, nervousness. | Manufacturing Planning and Control MPC 6th Edition Chapter 6a Advanced Material Requirements Planning After the initial phase of Material Requirements Planning (MRP) is complete, advanced issues become the new focus of the firm. Agenda Determining Manufacturing Order Quantities A number of quantity-determination (lot-sizing) procedures have been developed The primary consideration in MRP lot-sizing procedures is the nature of the net requirements data Requirements don’t reflect the independent demand assumption of constant uniform demand Requirements are discrete Requirements can be lumpy MRP Lot-Sizing Assumptions All requirements occur at the beginning of the period All future requirements must be met (no backorders) Ordering decisions occur at regular intervals Requirements are appropriately offset for manufacturing lead times Component requirements are satisfied at a uniform rate during each period Determining Order Quantities Economic Order Quantity (EOQ) Simple, widely used . | Manufacturing Planning and Control MPC 6th Edition Chapter 6a Advanced Material Requirements Planning After the initial phase of Material Requirements Planning (MRP) is complete, advanced issues become the new focus of the firm. Agenda Determining Manufacturing Order Quantities A number of quantity-determination (lot-sizing) procedures have been developed The primary consideration in MRP lot-sizing procedures is the nature of the net requirements data Requirements don’t reflect the independent demand assumption of constant uniform demand Requirements are discrete Requirements can be lumpy MRP Lot-Sizing Assumptions All requirements occur at the beginning of the period All future requirements must be met (no backorders) Ordering decisions occur at regular intervals Requirements are appropriately offset for manufacturing lead times Component requirements are satisfied at a uniform rate during each period Determining Order Quantities Economic Order Quantity (EOQ) Simple, widely used technique Assumes constant, uniform demand May require adjustment when demand is lumpy Periodic Order Quantity (POQ) Uses EOQ formula to compute time between orders (TBO) Lot-size varies based upon the forecast requirements for the coverage period Doesn’t allow for combining orders during periods of light demand Part Period Balancing (PPB) Attempts to equalize the costs of ordering and holding inventory Considers alternate coverage periods and the scenario where ordering and inventory costs are most nearly equal Won’t always identify the cost-minimizing plan Wagner-Whitin Algorithm Optimizing procedure to identify the cost-minimizing plan for a time-phased schedule Requires much more computational effort May not identify optimal plan under all conditions Buffering against Uncertainty Buffering can be effective when uncertainty is unavoidable Buffering should not be used to accommodate a poorly performing MRP system Uncertainty has two main sources Demand–timing and quantity Supply–timing .
