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ead times ? Resulting in higher inventory levels and longer manufacturing cycle times Copyright 169。2023 Qi Chao. All rights reserved. 68 Problems in MRP ?System nervousness ? When a small change in the master production schedule results in a large change in planned order releases. ? This can lead time strange effects. For instance as we demonstrate with the following example, it is actually possible for a decrease in demand to cause a formerly feasible MRP plan to bee infeasible Copyright 169。2023 Qi Chao. All rights reserved. 69 Example (Vollmann et al. 1992) ? Two parts are produced. ? Item A has a lead time of 2 weeks and uses the fixed order period (FOP) lot sizing rule with an order period of five weeks. ? Each unit of A requires one unit of ponent B ? B has a lead time of 4 weeks and uses the FOP rule with an order period of 5 weeks. Copyright 169。2023 Qi Chao. All rights reserved. 70 Part A 1 2 3 4 5 6 7 8 Gross requirements 2 24 3 5 1 3 4 50 Scheduled receipts Adjusted SRs Projected onhand 28 26 2 1 Net requirements 1 5 1 3 4 50 Planned order receipts (FOP=5w) 14 50 Planned order releases 14 50 MRP calculations for item A before change in demand Copyright 169。2023 Qi Chao. All rights reserved. 71 Part B 1 2 3 4 5 6 7 8 Gross requirements 14 50 Scheduled receipts 14 Adjusted SRs 14 Projected onhand 2 2 2 2 2 2 48 Net requirements 48 Planned order receipts (FOP=4w) 48 Planned order releases 48 MRP calculations for item B before change in demand Copyright 169。2023 Qi Chao. All rights reserved. 72 Part A 1 2 3 4 5 6 7 8 Gross requirements 2 23 3 5 1 3 4 50 Scheduled receipts Adjusted SRs Projected onhand 28 Net requirements Planned order receipts (FOP=5w) Planned order releases MRP calculations for item A after change in demand Copyright 169。2023 Qi Chao. All rights reserved. 73 Part A 1 2 3 4 5 6 7 8 Gross requirements 2 23 3 5 1 3 4 50 Scheduled receipts Adjusted SRs Projected onhand 28 26 3 0 5 Net requirements 5 1 3 4 50 Planned order receipts (FOP=5w) 63 Planned order releases (LT=2) 63 MRP calculations for item A after change in demand Copyright 169。2023 Qi Chao. All rights reserved. 74 Part B 1 2 3 4 5 6 7 8 Gross requirements Scheduled receipts 14 Adjusted SRs Projected onhand 2 Net requirements Planned order receipts (FOP=5w) Planned order releases MRP calculations for item B after change in demand Copyright 169。2023 Qi Chao. All rights reserved. 75 Part B 1 2 3 4 5 6 7 8 Gross requirements 63 Scheduled receipts 14 Adjusted SRs 14 Projected onhand 2 2 47 Net requirements 47 Planned order receipts (FOP=5w) 47 Planned order releases 47* MRP calculations for item B after change in demand Copyright 169。2023 Qi Chao. All rights reserved. 76 How to do with system nervousness? ? Frozen zone ? An initial number of periods in the MPS in which changes are not permitted ? Early planned order releases are the ones in which change is most disruptive. ? Time fences ? The earliest time fence is absolutely frozen ? The next fence is restricted but less restricted… ? Firm planned orders ? FPO fix early planned order releases Copyright 169。2023 Qi Chao. All rights reserved. 77 Part A 1 2 3 4 5 6 7 8 Gross requirements 2 23 3 5 1 3 4 50 Scheduled receipts Firm planned orders 14 Projected onhand 28 Net requirements Planned order receipts (FOP=5w) [14] Planned order releases [14] MRP calculations for item A after change with FPO Copyright 169。2023 Qi Chao. All rights reserved. 78 Part A 1 2 3 4 5 6 7 8 Gross requirements 2 23 3 5 1 3 4 50 Scheduled receipts Firm planned orders 14 Projected onhand 28 26 3 14 9 8 5 1 49 Net requirements 49 Planned order receipts (FOP=5w) [14] 49 Planned order releases [14] 49 MRP calculations for item A after change with FPO Copyright 169。2023 Qi Chao. All rights reserved. 79 Part B 1 2 3 4 5 6 7 8 Gross requirements Scheduled receipts 14 Adjusted SRs Projected onhand 2 Net requirements Planned order receipts (FOP=5w) Planned order releases MRP calculations for item B after change with FPO Copyright 169。2023 Qi Chao. All rights reserved. 80 Part B 1 2 3 4 5 6 7 8 Gross requirements 14 49 Scheduled receipts 14 Adjusted SRs Projected onhand 2 2 2 2 2 2 47 Net requirements 47 Planned order receipts (FOP=5w) 47 Planned order releases 47 MRP calculations for item B after change with FPO Copyright 169。2023 Qi Chao. All rights reserved. 81 Hubbell Lighting Case ?Manufactures Industrial Lighting Products ?GoodQuality Products ?Poor at Meeting Due Dates ?Work is Specialized for Each Customer ?Job Shop Environment ?Complex Products Copyright 169。2023 Qi Chao. All rights reserved. 82 Hubbell Lighting Case Before MRP Implementation ? Less than 75% of orders pleted on time After MRP Implementation ? 97% of orders pleted on time ? 2% of orders pleted with 1 to 2 days after due date Copyright 169。2023 Qi Chao. All rights reserved. 83 Summary of MRP MRP is a… .. ?Computerized Inventory Control ?Production Planning System that… .. ?Schedules Component Items as Needed which will… .. ?Track Inventory and… .. ?Help you in many other aspects of business Copyright 169。2023 Qi Chao. All rights reserved. 84 MRP II ?Manufacturing resources planning addresses deficiencies of MRP ?Bring together other functions subsumed by MRP including demand management, forecasting, capacity planning, master production scheduling, roughcut capacity planning, capacity requirements planning, dispatching, an input/output control Copyright 169。2023 Qi Chao. All rights reserved. 85 MRPII Copyright 169。2023 Qi Chao. All rights reserved. 86 LongRange Planning ? Planning range ? Around