MRP Matrix

MRP Matrix (MRP Record or MRP Process) consists of following 6 items.

¨ Gross Requirements: the total amount required for a particular item

¨ Scheduled Receipts: orders that have already released and are scheduled to
arrive as of the beginning of the period
¨ Projected available balance : amount of inventory that is expected at the end
of a period
Projected available balance (t)= projected available balance (t-1) + scheduled
receipts(t) + planned order receipts(t) – gross requirement(t)
Note: “safety stock” of an item will be retained throughout periods once it is
obtained.
¨ Net requirements: the amount needed when the projected available balance
plus the scheduled receipts in a period are not sufficient to cover the gross
requirement.
¨ Planned order receipts: the amount that will be ordered and when that amount
must be received
¨ Planed order releases: this determines when orders should be placed (i.e.,
released) so that they are received when needed
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 Extra MRP Example
Item On-Hand Lead Time (W eeks)
X X 50 2
A 75 3
B 25 1
A(2) B(1) C 10 2
D 20 2

C(3) C(2) D(5)

Requirements include 95 units (80 firm orders and 15 forecast) of X in
week 10.
*Note: Such material requirement information will be given for MRP problems in this course.

9- 35
 Week: 1 2 3 4 5 6 7 8 9 10
X X
LT=2
Gross requirements
Scheduled receipts
95

Proj. avail. balance 50 50 50 50 50 50 50 50 50 0

On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A Gross requirements 90
A(2) LT=3 Scheduled receipts
Proj. avail. balance 75 75 75 75 75 75 75 0
On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
B Gross requirements 45
LT=1 Scheduled receipts
It takes On-
Proj. avail. balance
Net requirements
25 25 25 25 25 25 25 0
20
2 A’s for hand
25
Planned order receipt
Planner order release 20
20

each X C
LT=2
Gross requirements
Scheduled receipts
45 40

Proj. avail. balance 10 10 10 10

On- Net requirements 35 40
hand Planned order receipt 35 40
10 Planner order release 35 40
D Gross requirements 100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 0
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80
 Week: 1 2 3 4 5 6 7 8 9 10
X X
LT=2
Gross requirements
Scheduled receipts
95

Proj. avail. balance 50 50 50 50 50 50 50 50 50 0

On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A(2) B(1) A
LT=3
Gross requirements
Scheduled receipts
90

Proj. avail. balance 75 75 75 75 75 75 75 0

On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
B Gross requirements 45
LT=1 Scheduled receipts
It takes Proj. avail. balance 25 25 25 25 25 25 25 0
On- Net requirements 20
1 B for hand
25
Planned order receipt
Planner order release 20
20

each X C
LT=2
Gross requirements
Scheduled receipts
45 40

Proj. avail. balance 10 10 10 10

On- Net requirements 35 40
hand Planned order receipt 35 40
10 Planner order release 35 40
D Gross requirements 100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 0
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80
 Week: 1 2 3 4 5 6 7 8 9 10
X X
LT=2
Gross requirements
Scheduled receipts
95

Proj. avail. balance 50 50 50 50 50 50 50 50 50 0

On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A(2) B(1) A
LT=3
Gross requirements
Scheduled receipts
90

Proj. avail. balance 75 75 75 75 75 75 75 0

On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
C(3) B
LT=1
Gross requirements
Scheduled receipts
45

Proj. avail. balance 25 25 25 25 25 25 25 0

On- Net requirements 20
hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
It takes 3 LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 0
C’s for On-
hand
Net requirements
Planned order receipt
35
35
40
40
each A 10
D
Planner order release
Gross requirements
35 40
100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 0
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80
 Week: 1 2 3 4 5 6 7 8 9 10
X X
LT=2
Gross requirements
Scheduled receipts
95

Proj. avail. balance 50 50 50 50 50 50 50 50 50 0

On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A(2) B(1) A
LT=3
Gross requirements
Scheduled receipts
90

Proj. avail. balance 75 75 75 75 75 75 75 0

On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
C(3) C(2) B
LT=1
Gross requirements
Scheduled receipts
45

Proj. avail. balance 25 25 25 25 25 25 25 0

On- Net requirements 20
hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
It takes 2 LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 0
C’s for On-
hand
Net requirements
Planned order receipt
35
35
40
40
each B 10
D
Planner order release
Gross requirements
35 40
100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 0
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80
 Week: 1 2 3 4 5 6 7 8 9 10
X X
LT=2
Gross requirements
Scheduled receipts
95

Proj. avail. balance 50 50 50 50 50 50 50 50 50 0

On- Net requirements 45
hand Planned order receipt 45
50 Planner order release 45
A(2) B(1) A
LT=3
Gross requirements
Scheduled receipts
90

Proj. avail. balance 75 75 75 75 75 75 75 0

On- Net requirements 15
hand Planned order receipt 15
75 Planner order release 15
C(3) C(2) D(5) B
LT=1
Gross requirements
Scheduled receipts
45

Proj. avail. balance 25 25 25 25 25 25 25 0

On- Net requirements 20
hand Planned order receipt 20
25 Planner order release 20
C Gross requirements 45 40
It takes 5 LT=2 Scheduled receipts
Proj. avail. balance 10 10 10 10 0
D’s for each On-
hand
Net requirements
Planned order receipt
35
35
40
40
B 10
D
Planner order release
Gross requirements
35 40
100
LT=2 Scheduled receipts
Proj. avail. balance 20 20 20 20 20 20 0
On- Net requirements 80
hand Planned order receipt 80
20 Planner order release 80
 Exercise: Now consider the extra demand for the
parts (in the name of spares)

Item On-Hand Lead Time (W eeks)

X X 50 2
A 75 3
B 25 1
A(2) B(1) C 10 2
D 20 2

C(3) C(2) D(5)

Requirements include 95 units (80 firm orders and 15 forecast) of X in
week 10 plus the following spares:
Spares 1 2 3 4 5 6 7 8 9 10
A 12
B 7
C 10
D 15
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43

Question Bowl

Which type of industry has only “medium”

expected benefits from the use of MRP?
a. Assemble-to-stock
b. Fabricate-to-stock
c. Assemble-to-order
d. Fabricate-to-order
e. Process industries
Answer: e. Process industries

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44

Question Bowl

To ensure good master scheduling, a master

scheduler must do which of the following?
a. Never lose sight of the aggregate plan
b. Identify and communicate all problems
c. Be involved with customer order promises
d. Be visible to all levels of management
e. All of the above
Answer: e. All of the above (Correct answer can also
include objectively trading off manufacturing, marketing,
and engineering conflicts and include all demands from
product sales, warehouse replenishment, spares, and
interplant requirements.) 9- 44
45

Question Bowl

The purpose of a “time fence” is which of the

following?

a. Make sure the cows don’t get out of the barn

b. Control flow through the production system
c. Maximize sales to retailers
d. All of the above
e. None of the above
Answer: b. Control flow through the
production system
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46

Question Bowl

Which of the following is an objective under an

MRP system?

a. To improve customer service

b. Minimize inventory investment
c. Maximize production operating efficiency
d. All of the above
e. None of the above
Answer: d. All of the above

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47

Question Bowl

Which of the following is one of the three main

inputs into an MRP system?

a. BOM file
b. Exception report
c. Planning report
d. All of the above
e. None of the above
Answer: a. BOM file (Correct answer can
also include Master Schedule and Inventory
Records File.) 9- 47
48

Question Bowl

An MRP program accesses the status of a job according to specific

time periods called which of the following?
a. Peg record
b. Time fence
c. Time bucket
d. Time clock
e. None of the above

Answer: c. Time bucket

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49

Question Bowl

In MRP, workload per work center can be determined. When the

work capacity is exceeded, which of the following options
can be implemented to correct the imbalance of workload?

a. Work overtime
b. Renegotiate the due date and reschedule
c. Subcontract to an outside shop
d. All of the above
e. None of the above

Answer: d. All of the above (Correct answer can also

include selecting an alternative work center and
rescheduling the work at a different time.)
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50

Question Bowl

Which of the following are reasons why a Lot-For-Lot (L4L)

method of lot sizing can be used in an MRP application?

a. Minimizes carrying costs

b. Sets planned orders to exactly match the net requirements
c. Produces exactly what is needed
d. Does not carry any units over into future periods
e. All of the above

Answer: e. All of the above

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