- 1 -Session Three Information Used in the Materials Planning Process- Information used in material planning Differentiate among planning factors, inventory status data, and historical demand and usage data.# Inventory data Planning factors Lot size (order quantity)- The policy can be lot-for-lot to meet the exact quantity needed or a quantity based on EOQ or other factors. Lead time Safety stock Scrap- Material outside of specifications and that is not practical to rework. When a process produces scrap, MRP increases the planned order release amount for the parent item to account for a scrap or yield factor. Inventory status data On-hand balance - It includes inventory available for planning at all locations. Allocations- Some of the total inventory on hand may be reserved for or allocated to specific planned orders that have been released. Also, allocations may be used to manage expensive items or those in short supply. Scheduled receipts- A scheduled receipt is an open order. It appears in an MRP grid or record as due in a specific period (time bucket), but the items release date is not shown because the order occurred before the first period shown in the record. - A scheduled receipt consists of two parts: how much; when the item will arrive Historical demand and usage dataItem number; Item description; Stock locations; On-hand balances at each stock location; On-order information by due date;Reorder and safety stock information; Financial information; Usage; Unit of measure; Classification (ABC); Source code; Lead time - 2 - Explain the relative advantages of meaningful and non-meaningful item number. Advantages of meaningful codesAdvantages of non-meaningful codesEasier to understand, work with, and recall Shorter codes are faster to input or writeEasier recognition of part identity increases organization efficiencyNumerical codes are easier and faster to inputEasier to detect miscode items using size or color informationRandom or sequential number assignment is better at accommodating the growth of item numbersEasier to interpret using hyphens or symbolsNon-meaningful codes can be automatically generated by software# Introduction to the MPS Material-dominated vs. Processor-dominated scheduling Material-dominated scheduling is a technique that schedules materials before equipment or capacity. In contrast, processor-dominated scheduling is a technique that schedules equipment and capacity first. Master scheduling and MRP are in the material-dominated scheduling category. Goals of master scheduling Balance supply and demand per the production plan Plan efficient use of company resources Determine end-item priorities shown in the MPS Hand off from MPS to MRP, which then establishes and maintains the priorities for components and assemblies Sources of MPS RequirementSales forecast;Interplant order;Special Engineering needs;Service part requirement;Special promotion;Safety stock change;Anticipation buildup Explain the minimum length of the planning horizon for the MPS.-The planning horizon is the amount of time the MPS extends to the future. The MPS planning horizon should be at least as long as the cumulative lead time for the item being scheduled.- The planning horizon is usually longer than lead time to facilitate the following:1) Component lot sizing2) Shop floor and capacity planning3) Scheduling by the suppliers and work centers Bill of materials (see study notes of MPR)- Characteristics of the material planning progress - 3 -# Material Planning in different production environments* Not all production environments will require MRP systems. Project and Engineering-to-Order Environment Characteristics:- Demand is lumpy; product volume is low.- Project are often unique, generally large, and of lengthy duration. Material Planning Process: Project Planning ToolProcess Flow Environment Characteristics:- Demand is stable and continuous; volume is high and variety is medium to low.- Production is usually make-to-stock; it is scheduled to meet forecasted demand rather than customer orders.- All products have similar routines.- Products tend to be commodities, with exceptions in pharmaceuticals.- Plants are designed for a specific throughput and require specialized equipment. Material Planning Process: MRP with an optimizer scheduling software P3-35/ P.G. Lean/JIT Environment Characteristics:- Demand is stable and continuous, and volume is high.- Product variety is low, and products are standard and not complex.- Process is repetitive.- Machinery and workers in the factory are flexible. Material Planning Process: Forecasting + MRP + PULL + Waste elimination P3-37/ P.G. MRP Environment Characteristics:- Low volume/ high-varie