Chapter 14 MRP and ERP

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Global Management Studies
GMS 401
Sam Lampropoulos

CHAPTER 14 MATERIAL REQUIREMENTS PLANNING AND ENTERPRISE RESOURCE PLANNINGDEPENDENT DEMAND y Dependent demand demand for subassemblies parts or raw materials that are derived from the plan for production of finished goods y Independent demand of most finished goods and supplies is fairly steady once allowances are made for seasonal variationsOVERVIEW OF MRP y Enterprise resource planning ERP used to manage and coordinate all resources information and functions of an organization from a shared database y Material requirements planning MRP planning and scheduling techniques primarily used for batch production of the components of assembled items y Activity that determines the plans for purchasing and production of dependentdemand componentsMRP INPUTS y MRP system has three major sources of information 1 Master production schedule MPS anticipated build schedule stating which end items are to be produced when and in what quantities for the next 12 weeks or so y Separates planning horizon into series of time periods or time buckets which are expressed in weeks or days y Cumulative lead time sum of the lead times that sequential phases of a process require from ordering of
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