TransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-1?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458OperationsManagementMaterialRequirementsPlanning(MRP)Chapter14TransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-2?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458Outline¨GlobalCompanyProfile:CollinsIndustries¨DependentInventoryModelRequirements¨MasterProductionSchedule¨BillsofMaterials¨AccurateInventoryrecords¨PurchaseOrdersOutstanding¨LeadTimesforEachComponent¨MRPStructureTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-3?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458Outline-continued¨MRPManagement¨MRPDynamics¨MRPandJIT¨Lot-SizingTechniques¨ExtensionsinMRP¨Closed-LoopMRP¨CapacityPlanning¨MaterialrequirementsPlanningII(MRPII)¨EnterpriseResourcePlanning(ERP)TransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-4?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458Outline-continued¨MRPInServices¨DistributionResourcePlanning(DRP)¨DRPStructure¨AllocationTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-5?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458LearningObjectives¨Distinguishdependentfromindependentdemandinventory¨Definematerialrequirementsplanning¨ExplainthebenefitsofMRP¨IdentifytherequirementsofMRP,DRP,andERP¨Explaintheinputs&outputsofMRP¨ComputeorderreleasesTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-6?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458CollinsIndustries¨Largestmanufacturerofambulancesintheworld¨Internationalcompetitor¨12majorambulancedesigns¨18,000differentinventoryitems¨6,000manufacturedparts¨12,000purchasedparts¨MRP:IBM抯MAPICSTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-7?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458CollinsIndustries¨Collinsrequires:¨Materialplanmustmeetboththerequirementsofthemasterscheduleandthecapabilitiesoftheproductionfacility¨Planmustbeexecutedasdesigned¨Effective搕ime-phased?deliveries,consignments,andconstantreviewofpurchasemethods¨MaintenanceofrecordintegrityTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-8?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458InventoryProcessstageDemandTypeNumber&ValueOtherRawMaterialWIPFinishedGoodsIndependentDependentAItemsBItemsCItemsMaintenanceDependentOperatingInventoryClassificationsTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-9?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458ItemMaterialsWithIndependentDemandMaterialsWithDependentDemandDemandSourceCompanyCustomersParentItemsMaterialTypeFinishedGoodsWIP&RawMaterialsMethodofEstimatingDemandForecast&BookedCustomerOrdersCalculatedPlanningMethodEOQ&ROPMRPDependentversusIndependentDemandTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-10?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458InputstotheProductionPlanProductionPlanMarketingCustomerDemandEngineeringDesignCompletionManagementReturnonInvestmentCapitalHumanResourcesManpowerPlanningProcurementSupplierPerformanceFinanceCashFlowProductionCapacityInventoryTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-11?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458RequirementsforEffectiveUseofDependentDemandInventoryModelsEffectiveuseofdependentdemandinventorymodelsrequiresthattheoperationsmanagerknowthe:¨masterproductionschedule¨specificationsorbills-of-material¨inventoryavailability¨purchaseordersoutstanding¨leadtimesTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-12?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458ThePlanningProcessProductionPlanExecuteMaterialPlansMasterProductionScheduleMaterialRequirementsPlanCapacityRequirementsPlanExecuteCapacityPlansRealistic??NoYesTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-13?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458TypicalLevelfortheMasterSchedule¨Acustomerorderinajobshop(processfocused/maketoorder)company¨Modulesinarepetitive(assemble-to-stock)company¨Anenditeminacontinuous(productfocused/maketostock)companyTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-14?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458¨Listofcomponents&quantitiesneededtomakeproduct¨Providesproductstructure(tree)¨Parents:Itemsabovegivenlevel¨Children:Itemsbelowgivenlevel¨Showslow-levelcoding¨Lowestlevelinstructureitemoccurs¨Toplevelis0;nextlevelis1etc.Bill-of-MaterialTransparencyMasterstoaccompanyOperationsManagement,5E(Heizer&Render)14-15?1998byPrenticeHall,Inc.ASimon&SchusterCompanyUpperSaddleRiver,N.J.07458¨Modularbills¨Modulesarefinalcomponentsusedtomakeassemble-to-stockenditems¨Planningb