Chapter 11: Efcient Resource
Planning
Resource planning = A process that takes sales and operatons plans; processes informaton
in the way of tme standards, routnns, and other informaton on how services or products
are produced; and then plans the input requirements.
Material Requirements Planning
Material requirement planning (MRP) = A computerized informaton system developed
specifcally to help manufacturers manane dependent demand inventory and schedule
replenishment orders.
MRP explosion = A process that converts the requirements of various fnal products into a
material requirements plan that specifes the replenishment schedules of all the
subassemblies, components, and raw materials needed to produce the fnal product.
Dependent Demand
Dependent demand = The demand for an item that occurs because the quantty required
varies with the producton plans for other items held in the frmms inventory.
Parent = Any product that is manufactured from one or more components.
Component = An item that noes throunh one or more operatons to be transformed into or
become part of one or more parents.
Master Production Scheduling
Master production schedule (MPS) = A part of the material requirements plan that details
how many end items will be produced within specifed periods of tme.
Aspects of master schedulinn:
1. The sums of the quanttes in the MPS must equal those in the sales and operatons plan.
2. The producton quanttes must be allocated efciently over tme.
3. Capacity limitatons and botlenecks, such as machine or labor capacity, storane space, or
workinn capital, may determine the tminn and size of MPS quanttes.
, Developing a Master Production Schedule
The process of developinn an MPS includes:
Step (1) calculatnn the projected on-hand inventory
(projected on-hand inventory at end of this week) = (on-hand inventory at end of last week)
+ (MPS quantty due at start of this week) – (projected requirements this week).
Step (2) determininn the tminn and size of the producton quanttes of specifc products
The frst MPS quantty should be scheduled for the week when the projected on-hand
inventory refects a short-ane.
The last row indicates the periods in which producton of the MPS quanttes must benin so
that they will be available when indicated in the PMS quantty row.
Available-to-Promise Quantities
Available-to-promise (ATP) inventory = The quantty of end items that marketnn can
promise to deliver on specifed dates.
Planning
Resource planning = A process that takes sales and operatons plans; processes informaton
in the way of tme standards, routnns, and other informaton on how services or products
are produced; and then plans the input requirements.
Material Requirements Planning
Material requirement planning (MRP) = A computerized informaton system developed
specifcally to help manufacturers manane dependent demand inventory and schedule
replenishment orders.
MRP explosion = A process that converts the requirements of various fnal products into a
material requirements plan that specifes the replenishment schedules of all the
subassemblies, components, and raw materials needed to produce the fnal product.
Dependent Demand
Dependent demand = The demand for an item that occurs because the quantty required
varies with the producton plans for other items held in the frmms inventory.
Parent = Any product that is manufactured from one or more components.
Component = An item that noes throunh one or more operatons to be transformed into or
become part of one or more parents.
Master Production Scheduling
Master production schedule (MPS) = A part of the material requirements plan that details
how many end items will be produced within specifed periods of tme.
Aspects of master schedulinn:
1. The sums of the quanttes in the MPS must equal those in the sales and operatons plan.
2. The producton quanttes must be allocated efciently over tme.
3. Capacity limitatons and botlenecks, such as machine or labor capacity, storane space, or
workinn capital, may determine the tminn and size of MPS quanttes.
, Developing a Master Production Schedule
The process of developinn an MPS includes:
Step (1) calculatnn the projected on-hand inventory
(projected on-hand inventory at end of this week) = (on-hand inventory at end of last week)
+ (MPS quantty due at start of this week) – (projected requirements this week).
Step (2) determininn the tminn and size of the producton quanttes of specifc products
The frst MPS quantty should be scheduled for the week when the projected on-hand
inventory refects a short-ane.
The last row indicates the periods in which producton of the MPS quanttes must benin so
that they will be available when indicated in the PMS quantty row.
Available-to-Promise Quantities
Available-to-promise (ATP) inventory = The quantty of end items that marketnn can
promise to deliver on specifed dates.
