Free Essay

Sales & Opn Mrp

In: Other Topics

Submitted By rashmis12
Words 570
Pages 3
Decision Support System (DSS) – Model 3
Like the other models proposed above, this model is designed to carry inventory to avoid delay in customers.
Methodology:
Forecasting: Weekly forecast is done on the basis of previous 20 weeks demand using linear regression method.
Master Production Scheduling
For main products alpha and beta, MPS for a given week have been designed taken into account the
MPS (week t) = Forecast demand (week t) – Projects in hand (week t-1) - Scheduled Receipts + Safety stock.
Thus, Planned Order Release (week t-1) = MPS (week t)
For example, planned order Release (POR) for week 21 is equate to the MPS calculated for week 22. This gives a fair idea on the number of components and therefore sub-component required for fulfilling the respective MPS requirements.
For MRP explosion, the gross requirement are linked to parent to Planned order release for that concerned week. We are also following the lot for lot order policy (assuming a lead time of one week)
However for full-fledged production of components like Delta & Epsilon, and order requirements of components Delta, Epsilon and Gamma, we have assumed that scheduled receipt for a given week in reflected in the opening inventory of the preceding week. Thus for a given week t,
Planned Order Receipt (t) = Maximum (Gross Requirements (t) – Projects in hand (t-1) + Safety Stock
The rationale is the inappropriate accounting of schedule receipts for calculation of MPS and to ensure sufficient inventory is built up from the start to minimize overtime requirements in the later period. Not taken
Capacity Requirements Planning
For capacity requirements, we have calculated the capacity (i.e. time required) using the processing time devoted towards the production process of each product or component. No sequencing has been considered in terms of waiting period.
Priority Scheduling
No priority is assigned to any product.
Steps for DSS 1. Initialize the game 2. Press Make/Alter decisions. 3. Then make decisions for order sizing using “Use MRP”. This will populate the order fields with appropriate numbers. 4. Do not assign priority other than the mentioned value of 1. 5. Observe the overtime field for any overtime requirement for the given week 6. The press “Release Order” and “Simulate” 7. Repeat the above steps from 1-7 and observe the different fields (Inventory position, financial performance etc.) in the main sheet
Different cases
Four different cases were considered based on whether 1. Safety stock is taken as 500 or calculated as per the customer service level and standard deviation in the demand. 2. The last period production takes care of the next week or not. (Assuming profit can be maximized by not producing in the last week) Case | Profit | 1. Safety Stock = 500; No prod. In last week | 859665 | 2. Safety Stock = 500; Regular prod. In last week | 918111.75 | 3. Safety Stock ≠ 500; No prod. In last week | 785737.25 | 4. Safety Stock ≠ 500; Regular prod. In last week | 704041.5 |
All figures are in dollars
Using safety stock values calculated at 95% service level for each component and main products, we observe the profit to be less compared to the situation where safety stock is maintained at 500 due to occasional unavailability of components for production of alpha and beta
Safety stock calculated: | Alpha | Beta | Comma | Delta | Epsilon | Gamma | Fi | Safety Stock | 179.6852 | 145.0756 | 359.3704 | 200.9335 | 300.9246 | 145.0756 | 788.8996 |…...

Similar Documents

Free Essay

Mrp, Erp, Cad/Cam

...1.0 MATERIAL REQUIREMENTS PLANNING (MRP) DEFINITION Material requirements planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. It is the process that helps companies makes volume and timing calculation. Most of MRP is based on the software, sometime company use the existing software and make the new software based on the company wants. The objectives of MRP system are to: • Ensure materials are available for production and products are available for delivery to customers. • Maintain the lowest possible material and product levels in store. • Plan manufacturing activities, delivery schedules and purchasing activities. • Required goods are available when required at a right place and time. • Reduce storage and inventory holding cost and improve customer service. MRP system typically requires certain data records which the MRP programs checks and update. The chart below shows the information required to perform MRP and some of the output. Customer order record exactly what each customer has ordered, how many they ordered and when they required delivery. Forecast demand using historical data to predict future trends, cycle and seasonality is always difficult. This process is more to predict of the orders. Inventory record in MRP is to know how some of the required items already in stock. This stock may be in the progress or in raw of material. Bills of the material contains ......

Words: 1673 - Pages: 7

Premium Essay

Sales

...Contract of Sale. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing and the other to pay therefore a price certain in money or its equivalent. |Contract of Sale |Contract to Sell | |Title over the property passes to the buyer upon delivery unless |Ownership is retained by the seller whether or not there is | |there is a contrary agreement |delivery. Ownership passes to the buyer only upon full payment of| | |the price | |Non-payment of the purchase price is a negative resolutory |The payment in full is a positive suspensive condition, meaning, | |condition, meaning the sale becomes ineffective upon the |if the purchase price is not paid, the obligation to deliver and | |happening of such condition |to transfer ownership on the part of the seller does not become | | |effective | |After delivery of the objective, the seller loses ownership over |Whether there is delivery or not, the seller retains the | |it. Unless, the contract is set aside, he cannot......

Words: 14544 - Pages: 59

Free Essay

Mrp 2

...MANUFACTURING RESOURCES PLANNING What is MRP II and why it is being used Definition and History According to American Production and Inventory Control Society, MRP II can be defined as a method of the effective planning of all the resources of a manufacturing company (Higgins, Leroy and Tierney 1996). It is actually advancement or can be said as a upgrading of Material Requirement Planning System (MRP) system, which is a set of technique that uses bills of material, data and a master production schedule to calculate the requirements for materials in a manufacturing company. The MRP system was initiated in the 1960s and was spearheaded by a team of IBM innovators comprising Joe Orlicky, George Plossl and Ollie Wright who sought to create a structured methodology for planning and scheduling materials for complex manufactured products. Over the past 30 years MRP has spawned an entire industry in manufacturing and professional services. It has evolved hand in hand with technological advancements in the computer hardware industry. At the beginning, MRP systems were run on large mainframe computer costing a lot of money and required large technical staff to support them. However in the 1970s they underwent refinements that saw disparate modules get included and critical business concerns such as cost accounting and Capacity Requirements Planning get added. This gave rise to a new generation system called MRP II. Continued changes spurred by increased technological advances......

Words: 610 - Pages: 3

Premium Essay

Mrp-Toyota

...Mrp-Toyota Materials Requirements Planning (MRP) Material requirements planning (MRP) is a computer-based inventory management system designed to assist production managers in scheduling and placing orders for dependent demand items. Dependent demand items are components of finished goods—such as raw materials, component parts, and subassemblies—for which the amount of inventory needed depends on the level of production of the final product. For example, in a plant that manufactured bicycles, dependent demand inventory items might include aluminum, tires, seats, and derailleurs. The first MRP systems of inventory management evolved in the 1940s and 1950s. They used mainframe computers to explode information from a bill of materials for a certain finished product into a production and purchasing plan for components. Before long, MRP was expanded to include information feedback loops so that production personnel could change and update the inputs into the system as needed. The next generation of MRP, known as manufacturing resources planning or MRP II, also incorporated marketing, finance, accounting, engineering, and human resources aspects into the planning process. A related concept that expands on MRP is enterprise resources planning (ERP), which uses computer technology to link the various functional areas across an entire business enterprise. MRP works backward from a production plan for finished goods to develop requirements for components and raw materials.......

Words: 291 - Pages: 2

Free Essay

Mrp(Manufacturing Resource Planning)

..._______________________ ------------------------------------------------- Topic: MRP II (Manufacturing Resource Planning) ------------------------------------------------- 19th October Contents Executive summary 2 Introduction and background of MRP II 3 Implement in Manufacturing Industry 6 SWOT Analysis of MRP II System 8 Conclusion 9 Recommendations (Next generation of MRP II system) 11 Reference: 13 Executive summary The purpose of this report is to illustrate what MRP II is, what features it provides, and what benefit the manufacturers could get from it as well as the existent issues in MRP II system. The research also demonstrates how MRP II was implemented in manufacturing industry by studying a case of successful implementation of MRP II software. Introduction and background of MRP II MRP II is Manufacturing Resources Planning for short. It is defined as a man machine application system for the effective planning of all resources of all manufacturing company. From the global optimal point of view, using scientific method to plan, organize, control and coordinate all the manufacturing resources and all the links of operation of enterprises effectively and reasonably is what the MRP II concerned about. The purpose of using the MRP II system is to achieve continuous and balanced production and minimize the various items in the inventory. Eventually it......

Words: 2537 - Pages: 11

Premium Essay

Mrp Theory

...demand for labour is dependent on the output the labour can produce and the revenue that can be earned from selling that output. An example of this would be an increase in demand following an increase in the productivity of workers as this would result in higher output in a shorter period of time and thus a higher potential profit to be made. Marginal physical product is the change in quantity of total product resulting from a unit change in a variable output, most often labour, keeping all other inputs unchanged. In other words, it is the extra output produced by an additional worker. MPP is one half of the MRP formula, MPP x MR. Marginal revenue product is the change in a firm’s revenue resulting from employing an additional worker and is calculated by multiplying marginal product and marginal revenue. The MRP is the demand for labour curve and thus an increase in MRP, caused by a rise in productivity or the price of the product, will cause demand for labour to rise. Elasticity of demand for labour measures the responsiveness of demand for labour in relation to a change in the wage rate. For example, an elastic demand for labour would mean that, if wages were to fall largely, firm’s demand for workers would increase. On the other hand, if wages were to increase the demand for labour is likely to decrease. Factors that influence the elasticity of demand for labour include the PED of the product and the availability of capital as a substitute to workers. Question two-......

Words: 996 - Pages: 4

Premium Essay

Mrp Problems

...10.In the following MRP planning schedule for Item J, indicate the correct net requirements, planned order receipts, and planned order releases to meet the gross requirements. Lead-time is one week. Item: JOH: 40LT: 1SS: 0Q: L4L | | Week Number | | Item J | 0 | 1 | 2 | 3 | 4 | 5 | | Gross requirements | | | 75 | | 50 | 70 | | Scheduled receipts | | | | | | | | On Hand | 40 | 40 | 0 | 0 | 0 | | | Net requirements | 0 | 35 | | 50 | 70 | | | Planned order receipts | | 35 | | 50 | 70 | | | Planned order releases | 35 | | 50 | 70 | | | 11. Assume that Product Z is made of two units of A and four units of B. A is made of three units of C and four of D. D is made of two units of E. Lead times for purchase or fabrication of each unit to final assembly are: Z takes two weeks; A, B, C, and D take one week each; and E takes three weeks. Fifty units are required in Period 10. (Assume that there is currently no inventory on hand of any of these items) a. Show the bill-of-material. (Product Structure Tree) b. Develop an MRP planning schedule showing gross and net requirements and order release and order receipt dates. | Period: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | Item: | Z | Gross requirements | | | | | | | | | | 50 | OH: | 0 | Scheduled receipts | | | | | | | | | | | LT: | 2 | On-Hand Inventory from Prior Period | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | SS: | 0 | Net......

Words: 877 - Pages: 4

Premium Essay

Erp and Mrp System

...ERP system has evolved over the past thirty years. When it comes to the development of ERP, we need to review the MRP system. Generally, MRP processes specifically involve planning the use of materials necessary for manufacturing business products, so MRP is also a common function contained within an ERP [1]. ERP is an updated manufacturing resource system; it grew out of MRP II systems with relational database management, graphical user interface, and client and server architecture. In the system, the kinds of products and services offered by a company drive operation strategy. Products and services can be classified into make-to-order, make-to-stock. The MTO strategy only manufactures the end product once the customer places the order, while the MTS method forecasts demand to determine how much stock should be produced [2]. For example, Global bike incorporated produces some bikes after it received a sales order from its customers. These finished goods are used to meet customers’ need, they pertain to MTO strategy. On the other side, in the long production run, GBI may also forecast demands on the basis of sales, then produce bikes to put into inventory before customers place orders. It is an example of implement of MTS. Both MRP and ERP have their advantages and disadvantages. MRP helps to standardize business processes by offering automated methods for many areas of the business. Standardization leads to easily repeated processes and a platform for improving those......

Words: 622 - Pages: 3

Premium Essay

Mrp - Ibs Hyderabad

...Advertising: A Research Agenda" Journal of Marketing",Journal of the University of Southern California, 58, 1-19. Summary : This research explains the active role of the consumer in determining the effects of advertising has important implications for how the effects and effectiveness of advertising are measured and how various measures are interpreted. The present paper offers a discussion of these issues and compares and contrasts traditional notions regarding the measurement of advertising effects with notions that recognize the active role of the consumer in interacting with advertising and the advertiser. This research study defines the new interactive media as media that provide the opportunity to instantaneously advertise, execute a sale, and collect payment. With the advent of the Internet and other technologies, the interaction between and among consumers and marketers is becoming increasingly more pronounced. Consumers can collect and provide information by searching and navigating through commercial Web sites, they can post and customize their preferences, and they can communicate with other consumers as well as product and service providers. Similarly, marketers can use information obtained from consumers to customize their advertisement messages, to segment their audiences, to facilitate consumer search for selected types of information and products, and to collect information about consumers' preferences to improve future products and services. Moreover,......

Words: 5619 - Pages: 23

Free Essay

Mô HìNh Mrp

...IX HOẠCH ĐỊNH NHU CẦU VẬT LIỆU I. HỌACH ĐINH NHU CẦU NGUYÊN VẬT LIỆU 1- Kỹ thuật MRP(Material Requirement Planning) là một công cụ tính tóan nhu cầu MRP là một kỹ thuật ngược chiều quy trình công nghệ để tính nhu cầu nguyên vật liệu. Nó bắt đầu từ số lượng và thời hạn yêu cầu cho những sản phẩm cuối cùng đã được xác định trong kế hoạch tiến độ sản xuất chính, đểø xác định nhu cầu các chi tiết, các bộ phận cần có để đáp ứng kế hoạch tiến độ sản xuất chính. Phương pháp này xác định số lượng, thời gian cần có các bộ phận, chi tiết và thời gian cần đặt hàng để chúng sẵn sàng khi cần đến. Đầu tiên MRP được xem như là công cụ kiểm soát tồn kho, cung cấp các báo cáo cho biết các bộ phận chi tiết nào cần phải đặt hàng, khi nào đặt hàng và hoàn thành đơn hàng. Khi sử dụng thuật ngữ này, kỹ thuật MRP chỉ là kỹ thuật tính toán nhu cầu nguyên vật liệu cho các bộ phận sán phẩm hoàn thành, không bao hàm việc sử dụng các thông tin ngược để theo dõi tiến độ thực tế các đơn hàng cũng như việc điều chỉnh các đơn hàng cho phù hợp với thực tế. 2- MRP là một hệ thống kiểm soát và hoạch định Lôgic của MRP cho phép sử dụng rộng rãi hệ thống máy tính cung cấp thông tin cho hoạch định và kiểm soát cả nguyên vật liệu lẫn năng lực sản xuất để chế tạo sản phẩm. Logic MRP được mở rộng và trở thành bộ phận then chốt của hệ thống thông tin phục vụ hoạch định, kiểm soát sản xuất và mua sắm . Thông tin mà MRP cung cấp rất có ích trong việc hoạch định tiến độ vì nó xác định những ưu tiên......

Words: 5233 - Pages: 21

Premium Essay

Mrp - Riordan Manufacturing

...New System Proposal Part 4 MRP Proposal – Overview and Scope of Work Riordan has 500 employees with a projected annual earnings of $46 million and a fortune of 1000 enterprises with revenues of $1 billion. Riordan Manufacturing has 4 worldwide locations Albany Georgia, Pontiac Michigan, Hangzhou China, and the company headquarters in San Jose. Riordan is seeking a solution to improve the tracking and management of its raw materials and finished product inventory across all its plants. The receiving, manufacturing, and shipping process throughout all Riordan plants is predominantly manual and batch oriented. These manual processes are slow, prone to error, labor intensive, and the information transfer is slow. In addition, the annual physical inventory process is very costly across all of Riordan's facilities. The annual process of inventory is not reflective of inventory on a quarterly or monthly basis. Losses to inventory of finished product, raw materials, and supplies cannot be adequately explained on an annual basis. The company’s internal stakeholders are the receiving, shipping, and sales departments, inventory clerks, and technical staff. The external stakeholders are manufacturers, suppliers, and clients. Riordan strives to continue to be an industry leader in polymer materials manufacturing and distribution. While we are only addresses some of these stakeholders with our system, the company’s overall objective is to have an ERP that wraps around their ERP,......

Words: 4025 - Pages: 17

Free Essay

Mrp-Toyota

...Requirements Planning (MRP) Material requirements planning (MRP) is a computer-based inventory management system designed to assist production managers in scheduling and placing orders for dependent demand items. Dependent demand items are components of finished goods—such as raw materials, component parts, and subassemblies—for which the amount of inventory needed depends on the level of production of the final product. For example, in a plant that manufactured bicycles, dependent demand inventory items might include aluminum, tires, seats, and derailleurs. The first MRP systems of inventory management evolved in the 1940s and 1950s. They used mainframe computers to explode information from a bill of materials for a certain finished product into a production and purchasing plan for components. Before long, MRP was expanded to include information feedback loops so that production personnel could change and update the inputs into the system as needed. The next generation of MRP, known as manufacturing resources planning or MRP II, also incorporated marketing, finance, accounting, engineering, and human resources aspects into the planning process. A related concept that expands on MRP is enterprise resources planning (ERP), which uses computer technology to link the various functional areas across an entire business enterprise. MRP works backward from a production plan for finished goods to develop requirements for components and raw materials. "MRP begins with a......

Words: 2834 - Pages: 12

Free Essay

Sales

...Nowadays, using of transaction processing system in companies and other establishments in transacting with their clients is a big factor or help for them. Some of the companies or stores are still using the manual way in running their business. By using the manual way, they consume more time and energy just to finish their work. So, companies now are making their system computerized because this can help them minimize the time and efforts consumed by using manual-system. So, we decided to create a sales and inventory system. A sale is an activity involved in the selling of products or services in return for money or other compensation. It is an act of completion of a commercial activity while inventory A list of what you have in company accounts. Inventory usually refers to the value of stocks, as distinct from fixed assets. An inventory would include items which are held for sale in the ordinary course of business or which are in the process of production for the purpose of sale. Sales and Inventory System is designed for a business that desires a control over stock levels and inventory tracking. This system can be used either as simple inventory control system or a complete manufacturing solution. In today’s generation We are engaged in highly computerized technology aiming to enhance individual lifestyle and most especially in the world of business. This inventory system helps you increase revenue because it saves processing time & help to......

Words: 377 - Pages: 2

Premium Essay

Sales

...Sales Sales Promotion Techniques Sales Promotion Techniques Merrick Morlan Axia College Online at University of Phoenix Abstract The example of Coca-Cola is used to readily to describe the following classifications of sales promotion techniques; discounts and deals, industry visibility, price-based consumer sales promotions, and attention-getting consumer sales promotions. Along with definitions of each type of sales promotions. The techniques are the same despite the change in voice and manner of delivery. Sales Promotion Technique Sales promotions are techniques that marketing departments use to build interest in the purchase of a good or service during a specified period of time. There are four main key sales promotion techniques including discounts and deals, increasing industry visibility, price-based consumer sales promotion, and attention-getting consumer sales promotion. The examples from the Coca-Cola Company are immense in marketing savvy and use, there also is an abundance of public information available in which to analyze and see clearly some of the methods in use. When using the process of discount and deal promotion, the manufacturing company offers the product at a discounted rate. The two types of discount and deal promotions are merchandising and case allowance. When Coca-Cola offers a merchandising allowance, they pay or give discounts to the store or other retailer for creating an off-shelf display of the products. In the case of...

Words: 302 - Pages: 2

Premium Essay

Opn Case Study

...SAMPLE CASE STUDIES – OPERATIONS Case Study 1 Make Versus Buy Case ABC Ltd. is a manufacturing company engaged in the manufacturing of valves. They have been in the business for last 3 years and have been manufacturing only one type of valves. They started their business initially with sales of 10,000 valves per month and now they have grown the volume to about 50,000 valves per month. They have been buying all the raw material for the valve and were doing all the manufacturing in house. Now they have established themselves in the market and are planning to expand and produce different varieties of valves. They have their plant in the main city and the total area of the plant is 50,000 sq. ft. Now if they want to expand and continue doing all the activities of manufacturing of all the varieties in house, they would need another 50,000 sq.ft. of the area. In the recent times, the land prices in the area have more than doubled in the last 3 years and still land is available with great difficulty. Mr. Mohan is the production head of ABC Ltd. and has been successful with the production and the level is continuously increasing. But in recent times, he is facing the problem of quality complaints which have gone up from average 0.2 % in previous 2 years to 0.5 % this year. Also, he is finding that there is a high level of dissatisfaction among the workers regarding workload as well as salary levels. The workers are regularly complaining about the over......

Words: 2772 - Pages: 12