Resource Planning

Resource Planning
Dr. S. S. Bhakar
To Accompany Ritzman & Krajewski Foundations of Operations Management, 2003 Prentice Hall, Inc. All rights reserved.
Demand Patterns
Demand Patterns
2000 2000 1500 1500
Bicycles
500
Rims
1000
1000
500
0 | 1 (a) Figure 1521 | | | | | 5 Day | | | | 10 (b)
0 | 1 | | | | | 5 Day | | | | 10
Demand Patterns
2000 2000 1500 1500
Bicycles
500
Rims
Reorder point | | | | | | | | 5 10 Day
1000
1000
500
0 | 1 (a) Figure 12.1 |
0 | 1 (b) | | | | | 5 Day | | | | 10
Demand Patterns
2000 2000 1500 Order 1000 on day 3 1500
Bicycles
500
Rims
1000
1000
500
0 | 1 (a) Figure 12.1 |
0 | 1 (b) | | | | | 5 Day | | | | 10
Demand Patterns
2000 2000 1500 Order 1000 on day 3 1500
Bicycles
500
Rims
1000
1000
500
0 | 1 (a) Figure 12.1 |
0 | 1 (b) | | | | | 5 Day | | | | 10
Demand Patterns
2000 2000 1500 Order 1000 on day 3 Order 1000 on day 8 1500
Bicycles
500
Rims
1000
1000
500
0 | 1 (a) Figure 12.1 |
0 | 1 (b) | | | | | 5 Day | | | | 10
Demand Patterns
Bicycles
500
Rims
1000
1000
500
0 | 1 (a) Figure 12.1 |
0 | 1 (b) | | | | | 5 Day | | | | 10
Demand Patterns
Bicycles
500
Rims
1000
1000
500
0 | 1 (a) Figure 12.1 |
0 | 1 (b) | | | | | 5 Day | | | | 10
Material Requirements Plan Inputs
Bills of materials
Engineering and process designs
Figure 12.2

Authorized master production schedule Other sources of demand
Bills of materials
Figure 12.2

Inventory transactions
Inventory records
Bills of materials
Figure 12.2
Material Requirements Plan Explosion

Inventory records
MRP explosion
Bills of materials
Figure 12.2
Material Requirements Plan Output

Inventory records
MRP explosion
Bills of materials
Material requirements plan Figure 12.2

Bill of Materials
Bill of Materials
Back slats Seat cushion
Leg supports Back legs Front legs
Seat-frame boards
A Ladder-back chair
Figure 12.3
Bill of Materials
A Ladder-back chair
B (1) Ladder-back subassembly
C (1) Seat subassembly
Back slats
D (2) Front legs
Seat cushion
E (4) Leg supports
Leg supports
F (2) Back legs G (4) Back slats H (1) Seat frame I (1) Seat cushion
Seat-frame boards
Back legs
Front legs
J (4) Seat-frame boards
A Ladder-back chair
Figure 12.3
Master Production Schedule
Master Production Schedule

April 1 Ladder-back chair Kitchen chair Desk chair Aggregate production plan for chair family 200 670 200 150 120 200 670 2 3 4 5 6 150 120 200 May 7 8
Figure 12.4
Inventory Record
Inventory Record
Item: C Description: Seat subassembly Week 1 Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 37 150 2 0 3 0 4 120 5 0 6 150 7 120
Figure 12.5
Lot Size: 230 units Lead Time: 2 weeks
8 0
230
Inventory Record
Figure 12.5
8 0
230
Explanation: Gross requirements are the total demand for the two chairs. Projected on-hand inventory in week 1 is 37 + 230 150
Inventory Record
Figure 12.5
8 0
230
117
Explanation: Gross requirements are the total demand for the two chairs. Projected on-hand inventory in week 1 is 37 + 230 150 = 117 units.
Inventory Record
Figure 12.5
8 0
230
117
Inventory Record
Item: C Description: Seat subassembly Week 1 Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts 37 150 2 0 3 0 4 120 5 0 6 150 7 120
Figure 12.5
8 0
230
117
Projected on-hand inventory balance Planned order releases at end of week t
Inventory on hand at end of week t - 1
Scheduled or planned receipts in week t
Gross requirements in week t
Inventory Record
Item: C Description: Seat subassembly Week 1 Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts 37 150 2 0 3 0 4 120 5 0 6 150 7 120
Figure 12.5
8 0
230
117
117
117
153
273
273
Projected on-hand inventory balance Planned order releases at end of week t
Inventory on hand at end of week t - 1
Scheduled or planned receipts in week t
Gross requirements in week t
Planned Orders
Explanation: Item: C Description: Seat subassembly Without a new order in week 4, there will be a shortage of three units: 117 + 0 + 0 120 = 3 units. 1 2
Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 37 150 0 Week 3 0 4 120 5 0 6 150 7 120
Figure 12.5
8 0
230
117
117
117
153
273
273
Planned Orders
Figure 12.5
8 0
230
117
117
117
Planned Orders
Explanation: Item: C Description: Seat subassembly Adding the planned receipt brings the balance to 117 + 0 + 230 120 = 227 units.
1 Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 37 150 2 0 3 0 4 120 Week 5 0 6 150 7 120
Figure 12.5
8 0
230
117
117
117
227
230
Planned Orders
Explanation: Item: C Description: Seat subassembly Adding the planned receipt brings the balance to 117 + 0 + 230 120 = 227 units.
1 Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 37 150 2 0 3 0 4 120 Week 5 0 6 150 7 120
Figure 12.5
8 0
230
117
117
117
227
230
Planned Orders
Explanation: Item: C Description: a two-week lead Offsetting for Seat subassembly time puts the corresponding planned order release back to week 2.
1 Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 230 37 150 2 0 3 0 4 120 Week 5 0 6 150 7 120
Figure 12.6
8 0
230
117
117
117
227
230
Planned Orders
Explanation: Item: C Description: a two-week lead Offsetting for Seat subassembly time puts the corresponding planned order release back to week 2.
Figure 12.6
8 0
230
117
117
117
227
230
Planned Orders
Explanation: Item: C TheDescription: Seat order lasts first planned subassembly until week 7, when projected inventory would drop to 43.
Figure 12.6
8 0
230
117
117
117
227
227
77
43
230
Planned Orders
Explanation: Item: C Description: Seat subassembly Adding the second planned receipt brings the balance to 77 + 0 + 230 120 = 187.
Figure 12.6
8 0
230
117
117
117
227
227
77
230
230
Planned Orders
Explanation: Item: C Description: Seat subassembly Adding the second planned receipt brings the balance to 77 + 0 + 230 120 = 187.
Figure 12.6
8 0
230
117
117
117
227
227
77
187
230
230
Planned Orders
Explanation: Item: C TheDescription: Seat subassembly corresponding planned order release is for week 5.
Figure 12.6
8 0
230
117
117
117
227
227
77
187
230
230
230
Planned Orders
Item: C Description: Seat subassembly Week 1 Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 230 37 150 2 0 3 0 4 120 5 0 6 150 7 120
Figure 12.6
8 0
230
117
117
117
227
227
77
187
187
230
230
230
Lot-Sizing Rule Comparison

The FOQ rule generates high average inventory because it creates remnants. The POQ rule reduces average on-hand inventory because it does a better job of matching order quantity to requirements. The L4L rule minimizes inventory investment but maximizes the number of orders placed.
Safety Stock
Safety Stock
Figure 12.7
MRP Outputs
MRP Outputs
MRP explosion
Figure 12.8
MRP Outputs
MRP explosion
Material requirements plan

Action notices Releasing new orders Adjusting due dates Priority reports Dispatch lists Supplier schedules Capacity reports Capacity requirements planning Finite capacity scheduling Input-output control
Figure 12.8
MRP Outputs
MRP explosion

Action notices Releasing new orders Adjusting due dates
Routings and time standards
Priority reports Dispatch lists Supplier schedules
Capacity reports Capacity requirements planning Finite capacity scheduling Input-output control
Figure 12.8
MRP Outputs
MRP explosion

Manufacturing resources plan

Performance reports
Figure 12.8
MRP Outputs
MRP explosion

Manufacturing resources plan

Performance reports Cost and price data
Figure 12.8
MRP Explosion
MRP Explosion
Item: Seat subassembly Lot size: 230 units Week Lead time: 2 weeks Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 230 37 1 150 2 0 3 0 4 120 5 0 6 150 7 120 8 0
230
117
117
117
227
227
77
187
187
230
230
230
Figure 12.9
MRP Explosion
Item: Seat subassembly Lot size: 230 units Lead time: 2 weeks Gross requirements Planned receipts Planned order releases 230 1 150 2 0 3 0 4 120 230
Week 5 0 6 150 7 120 8 0
230
230
Figure 12.9
MRP Explosion
Week 5 0 6 150 7 120 8 0
230
230
Item: Seat frames Lot size: 300 units Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand 40 inventory Planned receipts Planned order releases 0 300 0 0 0 0 0 0 1 2 3 4 5 6 7 8
Item: Seat cushion Lot size: L4L Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 0 0 0 0 0 0 0 0 0 1 2 3 4 5 6 7 8
Figure 12.9
MRP Explosion
Week 5 0 6 150 7 120 8 0
230
230
Usage quantity: 1
Item: Seat frames Lot size: 300 units Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand 40 inventory Planned receipts Planned order releases 1 0 2 230 3 4 5 6 7 8 Lead time: 1 week Gross requirements 0 0 0 0 0 0 Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 0 1 0 2 230 3 Item: Seat cushion Lot size: L4L
Usage quantity: 1
Week 4 5 6 7 8
300
Figure 12.9
MRP Explosion
Week 5 0 6 150 7 120 8 0
230
230
Usage quantity: 1
Item: Seat frames Lot size: 300 units Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand 40 inventory Planned receipts Planned order releases 1 0 2 230 3 0 4 0 5 230 6 7 8 Lead time: 1 week Gross requirements 0 0 0 Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 0 1 0 2 230 3 0 Item: Seat cushion Lot size: L4L
Usage quantity: 1
Week 4 0 5 230 6 7 8
300
Figure 12.96
MRP Explosion
Week 5 0 6 150 7 120 8 0
230
230
Item: Seat frames Lot size: 300 units Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand 40 inventory Planned receipts Planned order releases 300 1 0 2 230 3 0 4 0 5 230 6 0 7 0 8 0
Item: Seat cushion Lot size: L4L Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand inventory Planned receipts Planned order releases 230 0 1 0 2 230 3 0 4 0 5 230 6 0 7 0 8 0
300
40
110
110
110
180
180
180
180
300
230
230
230
Figure 12.9
MRP Explosion
Item: Seat frames Lot size: 300 units Lead time: 1 week Gross requirements Planned receipts Planned order releases 300 Week 1 0 2 230 3 0 4 0 5 230 6 0 7 0 8 0 300
Item: Seat cushion Lot size: L4L Week Lead time: 1 week Gross requirements Planned receipts Planned order releases 230 1 0 2 230 3 0 4 0 5 230 6 0 7 0 8 0
230
230
230
Figure 12.9
MRP Explosion
230
230
230
Item: Seat-frame boards Lot size: 1500 units Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand 200 inventory Planned receipts Planned order releases 0 0 0 0 0 0 0 0 1 2 3 4 5 6 7 8
Figure 12.9
MRP Explosion
230
230
230
Usage quantity: 4
Item: Seat-frame boards Lot size: 1500 units Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand 200 inventory Planned receipts Planned order releases 1 0 2 0 3 0 4 1200 5 0 6 0 7 0 8 0
Figure 12.9
MRP Explosion
230
230
230
Item: Seat-frame boards Lot size: 1500 units Week Lead time: 1 week Gross requirements Scheduled receipts Projected on-hand 200 inventory Planned receipts Planned order releases 1500 1 0 2 0 3 0 4 1200 5 0 6 0 7 0 8 0
200
200
200
500
500
500
500
500
1500
Figure 12.9
Capacity Requirements
Date: Plant 01 Dept. 03: Lathe Station Capacity: 320 hours per week Week 32 Planned hours Actual hours Total hours 90 33 156 34 349 35 210 36 360 37 280 Week: 32
Figure 12.10
Date: Plant 01 Dept. 03: Lathe Station Capacity: 320 hours per week Week 32 Planned hours Actual hours Total hours 90 210 33 156 104 34 349 41 35 210 0 36 360 0 37 280 0 Week: 32
Figure 12.10
Date: Plant 01 Dept. 03: Lathe Station Capacity: 320 hours per week Week 32 Planned hours Actual hours Total hours 90 210 300 33 156 104 260 34 349 41 390 35 210 0 210 36 360 0 360 37 280 0 280 Week: 32
Figure 12.10
Date: Plant 01 Dept. 03: Lathe Station Capacity: 320 hours per week Week 32 Planned hours Actual hours Total hours 90 210 300 33 156 104 260 34 349 41 390 35 210 0 210 36 360 0 360 37 280 0 280 Explanation: Projected capacity requirements exceed weekly hours of capacity.
Week: 32
Figure 12.10
MRP II
MRP II
Customer orders Forecasts Master production schedule
Figure 12.11
Bills of materials Routings Time standards
MRP explosion
Inventory records Inventory transactions
MRP II
Figure 12.11
MRP explosion
MRP II
Figure 12.11
MRP explosion
Material requirements plan Cost and financial data
Manufacturing resource plan
MRP II
Figure 12.11
MRP explosion
Material requirements plan Cost and financial data
Manufacturing resource plan
Purchasing reports
Financial/ accounting reports
Sales and marketing reports
Human resource reports
Manufacturing reports
Distribution Requirements Planning

Retail stores
Figure 12.12

Retail stores
Distribution centers
Figure 12.12

Retail stores
Distribution centers
Plants
Figure 12.12
Bill of Resources
Bill of Resources
Level 1 Discharge
Level 2 Intermediate care
Level 3 Postoperative care (Step down)
Level 4 Postoperative care (Intensive)
Level 5 Surgery
Level 6 Postoperative care (Angiogram)
Level 7 Postoperative care (Testing)
Figure 12.13
(a)
Bill of Resources
Level 1 Discharge
(b)
Level 5 Surgery
Figure 12.13
(a)
Bill of Resources
Level 1 Discharge
(b)
Level 5 Surgery
Figure 12.13
(a)
Bill of Resources
Level 1 Discharge
Nurse (6 hr)
MD (1 hr)
Therapy (1 hr)
Bed (24 hr)
Lab (3 tests)
Kitchen (1 meal)
Pharmacy (10 medicines)
(b)
Level 5 Surgery
Figure 12.13
(a)
Solved Problem 1
A LT = 1 B (3) LT = 2 D (1) LT = 3 E (2) LT = 6 F (1) LT = 1 G (1)
Figure 12.14
C (1) LT = 3 D (1) LT = 3
LT = 3
Solved Problem 2
B (1)
Table 12.1
A LT = 2 C (2) LT = 2 D (1)
D FOQ = 500 units 3 weeks None 425
LT = 1
Inventory Record Data
DATA CATEGORY Lot-sizing rule Lead time Scheduled receipts Beginning (on-hand) inventory
B POQ (P=3) 1 week None 20
ITEM C L4L 2 weeks 200 (week 1) 0
LT = 3
Figure 12.15
Solved Problem 2
Item: B Description: Week 1 Gross requirements Scheduled receipts Projected on-hand 20 inventory Planned receipts Planned order releases 280 20 200 200 0 0 240 60 0 2 100 3 4 200 5 6 120 7 180 8 60
Figure 12.16
Lot size: POQ (P = 3) Lead time: 1 week
10
280
360
360
Solved Problem 2
Item: C Description: Week 1 Gross requirements Scheduled receipts Projected on-hand 0 inventory Planned receipts Planned order releases 400 200 2 200 3 4 400 5 6 240 7 360 8 120
Figure 12.16
Lot size: L4L Lead time: 2 weeks
10
200
400
240
360
120
240
360
120
Solved Problem 2
Item: D Description: Week 1 Gross requirements Scheduled receipts Projected on-hand 425 inventory Planned receipts Planned order releases 500 500 425 25 25 285 425 305 305 305 2 400 3 4 240 5 360 6 120 7 8
Figure 12.16
Lot size: FOQ = 500 units Lead time: 3 weeks
10
360
305
500
500

Resource Planning

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0 | 1 (a) Figure 1521 | | | | | 5 Day | | | | 10 (b)

0 | 1 (a) Figure 12.1 |

0 | 1 (a) Figure 12.1 |

0 | 1 (a) Figure 12.1 |

0 | 1 (a) Figure 12.1 |

0 | 1 (a) Figure 12.1 |

0 | 1 (a) Figure 12.1 |

Material Requirements Plan Inputs

Material Requirements Plan Inputs

Engineering and process designs

Material Requirements Plan Inputs

Engineering and process designs

Material Requirements Plan Inputs

Engineering and process designs

Material Requirements Plan Explosion

Engineering and process designs

Material Requirements Plan Output

Engineering and process designs

Material requirements plan Figure 12.2

Leg supports Back legs Front legs

B (1) Ladder-back subassembly

C (1) Seat subassembly

D (2) Front legs

E (4) Leg supports

J (4) Seat-frame boards

Master Production Schedule

Master Production Schedule

Projected on-hand inventory balance Planned order releases at end of week t

Inventory on hand at end of week t - 1

Scheduled or planned receipts in week t

Gross requirements in week t

Projected on-hand inventory balance Planned order releases at end of week t

Inventory on hand at end of week t - 1

Scheduled or planned receipts in week t

Gross requirements in week t

Lot-Sizing Rule Comparison

Material requirements plan

Material requirements plan

Priority reports Dispatch lists Supplier schedules

Material requirements plan

Priority reports Dispatch lists Supplier schedules

Manufacturing resources plan

Material requirements plan

Priority reports Dispatch lists Supplier schedules

Manufacturing resources plan

Week 5 0 6 150 7 120 8 0

Week 5 0 6 150 7 120 8 0

Week 5 0 6 150 7 120 8 0

Week 5 0 6 150 7 120 8 0

Week 5 0 6 150 7 120 8 0

Bills of materials Routings Time standards

Inventory records Inventory transactions

Bills of materials Routings Time standards

Inventory records Inventory transactions

Material requirements plan

Bills of materials Routings Time standards

Inventory records Inventory transactions

Material requirements plan Cost and financial data

Manufacturing resource plan

Bills of materials Routings Time standards

Inventory records Inventory transactions