Stevenson Chapter 13-14
Introduction
This chapter describes material requirements planning and enterprise resource planning.
MRP is a planning and scheduling technique used for batch production of assembled items.
Material requirements planning is a methodology used for planning the production of assembled
products such as smartphones, automobiles, kitchen tables, and a whole host of other products
that are assembled. Some items are produced repetitively, while others are produced in batches.
The master schedule designates the quantity and completion time of an assembled
product, often referred to as the end item. Materials requirements planning then generates a
production plan for the end item that indicates the quantities and timing of the subassemblies,
component parts, and raw materials required for assembly of that end item. Although a master
production schedule has no set time period that it must cover, most managers like to plan far
enough into the future so they have some general idea of probable upcoming demands for the
near term. It is important, though, that the master schedule cover the stacked or cumulative lead
time necessary to produce the end items. This amounts to the sum of the lead times that
sequential phases of the production or assembly process require, as illustrated in Figure 13.4,
where a total of nine weeks of lead time is needed from ordering parts and raw materials until
final assembly is completed. Product structure tree a visual depiction of the requirements in a bill
of materials, where all components are listed by levels.
Just beneath it are the subassemblies, or major components, that must be put together to
make up the end item. At each stage moving down the tree are the components needed to make
one unit of the next higher item in the tree. A product structure tree is useful in illustrating how
the bill of materials is used to determine the quantities of each of the ingredients needed to obtain
a desired number of end items. Items at the lowest levels of a tree might be raw materials or
purchased parts, while items at higher levels are typically assemblies or subassemblies. End item
X is composed of two Bs and one C. These requirements are listed by level, beginning with 0 for
the end item, then 1 for the next level, and so on.
This screen shows a parts list along with a threedimensional view of the product. Andrey
Armyagov low-level coding Restructuring the bill of materials so that multiple occurrences of a
component all coincide with the lowest level at which the component occurs. Determining total
requirements is usually more complicated than Example 1 might suggest. For one thing, many
