Operation Management

• —Demand
• for items that are subassemblies or component parts to be used in the
• production of finished goods.

• —Dependent
• demand tends to be sporadic or “lumpy”

• a sequence of activities and
• organizations involved in producing and delivering a good or service

A computer-based information system that translates master schedule requirements for end items into time-phased requirements for subassemblies, components, and raw materials.

—The MRP is designed to answer three questions:

• 1.What
• is needed?

• 2.How
• much is needed?

• 3.When
• is it needed?

—The sum of the lead times that sequential phases of a process require, from ordering of parts or raw materials to completion of final assembly. 

—One of three primary inputs in MRP; states which end items are to be produced, when these are needed, and in what quantities.

—Managers like to plan far enough into the future so they have reasonable estimates of upcoming demands

—The master schedule should cover a period that is at least equivalent to the cumulative lead time

A listing of all of the assemblies, subassemblies, parts, and raw materials needed to produce one unit of a product

—A visual depiction of the requirements in a bill of materials, where all components are listed by levels

—Restructuring the bill of material so that multiple occurrences of a component all coincide with the lowest level at which the component occurs across ALL bill of materials.

—Includes information on the status of each item by time period, called time buckets

—Information about

—Gross requirements

—Scheduled receipts

—Expected amount on hand

—Other details for each item such as

—Supplier

—Lead time

—Lot size policy

—Changes due to stock receipts and withdrawals

—Canceled orders and similar events