Manufacturer : User Solutions, Inc
Excel templates for Material Requirements Planning include: MRP inventory plan and Period-order-quantity.
MRP1 computes weekly net requirements for an inventory item for up to 20 weeks in the future. The model then schedules planned order releases and receipts to satisfy those requirements. Leadtimes can range from 0 to 6 weeks. MRP1 can handle a variety of practical complications in inventory planning, such as units previously allocated to specific future production runs, previously scheduled order receipts, lot sizing, safety stocks, and yields which are less than 100% of production quantities.
MRP1 makes it easy to do a great deal of what-if analysis. A common problem in lot-sizing is that it frequently leads to carrying excess stock during periods of low demand. You can attempt to minimize excess stock by trying different lot sizes. If leadtimes are uncertain, you can add "safety leadtime" by trying larger leadtime values. If yields are uncertain, you can decrease the yield percentage. Another option is the POQ model in the next section.
Production economics may dictate the use of lot-sizing in MRP systems but the EOQ rarely works very well. The problem is that the EOQ is based on the assumption that demand is continuous and uniform. In MRP systems, demand for component parts tends to be "lumpy," that is, discontinuous and nonuniform, with frequent periods of zero demand. When the EOQ is applied to lumpy demand, lot sizes usually don't cover whole periods of demand. The result is that unnecessary inventory is often carried during the periods following the receipt of a lot. This unnecessary inventory is called "remnants" because it is left over from previous lots. The period-order-quantity (POQ) model was designed to avoid remnants and give lower costs with lumpy demand.
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