In this chapter, the following content will be discussed: Objectives of inventory management, lot size decision, inventory models, EOQ, robust model, reorder point, production order quantity model, quantity discount model. | LSM733-PRODUCTION OPERATIONS MANAGEMENT By: OSMAN BIN SAIF LECTURE 23 1 Summary of last Session CHAPTER : MATERIAL REQUIREMENT PLANNING Global Company Profile: Wheeled Coach Dependent Demand Dependent Inventory Model Requirements Master Production Schedule Bills of Material Accurate Inventory Records Purchase Orders Outstanding Lead Times for Components 2 2 Summary of this Session (Contd.) MRP Structure MRP Management MRP Dynamics MRP and JIT 3 3 Agenda for this Session Lot-Sizing Techniques Extensions of MRP Material Requirements Planning II (MRP II) Closed-Loop MRP Capacity Planning MRP In Services Distribution Resource Planning (DRP) 4 4 Agenda for this Session (Contd.) Enterprise Resource Planning (ERP) Advantages and Disadvantages of ERP Systems ERP in the Service Sector 5 5 Finite Capacity Scheduling MRP systems do not consider capacity during normal planning cycles Finite capacity scheduling (FCS) recognizes actual capacity limits By merging MRP and FCS, a finite schedule is . | LSM733-PRODUCTION OPERATIONS MANAGEMENT By: OSMAN BIN SAIF LECTURE 23 1 Summary of last Session CHAPTER : MATERIAL REQUIREMENT PLANNING Global Company Profile: Wheeled Coach Dependent Demand Dependent Inventory Model Requirements Master Production Schedule Bills of Material Accurate Inventory Records Purchase Orders Outstanding Lead Times for Components 2 2 Summary of this Session (Contd.) MRP Structure MRP Management MRP Dynamics MRP and JIT 3 3 Agenda for this Session Lot-Sizing Techniques Extensions of MRP Material Requirements Planning II (MRP II) Closed-Loop MRP Capacity Planning MRP In Services Distribution Resource Planning (DRP) 4 4 Agenda for this Session (Contd.) Enterprise Resource Planning (ERP) Advantages and Disadvantages of ERP Systems ERP in the Service Sector 5 5 Finite Capacity Scheduling MRP systems do not consider capacity during normal planning cycles Finite capacity scheduling (FCS) recognizes actual capacity limits By merging MRP and FCS, a finite schedule is created with feasible capacities which facilitates rapid material movement 6 6 Small Bucket Approach MRP “buckets” are reduced to daily or hourly The most common planning period (time bucket) for MRP systems is weekly Planned receipts are used internally to sequence production Inventory is moved through the plant on a JIT basis Completed products are moved to finished goods inventory which reduces required quantities for subsequent planned orders Back flushing based on the BOM is used to deduct inventory that was used in production 7 7 Balanced Flow Used in repetitive operations MRP plans are executed using JIT techniques based on “pull” principles Flows are carefully balanced with small lot sizes 8 8 Supermarket Items used by many products are held in a common area often called a supermarket Items are withdrawn as needed Inventory is maintained using JIT systems and procedures Common items are not planned by the MRP system 9 Lot-Sizing Techniques Lot-for-lot techniques order just
