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Production and Supply Chain Management Information Systems
start with the weekly master production schedule for NRG-A and NRG-B bars, and then we
will complete the following steps:
1. Convert the quantities of NRG bars from cases to 500-pound batches.
2. Multiply the number of batches by the pounds-per-batch quantities (which
are given in the BOM) to get the gross requirements for each raw material. 99
3. Subtract the existing raw material inventory and purchase orders that have
already been placed from the gross requirements, to determine the net
requirements.
4. Plan orders in multiples of the 44,000-pound lot size, allowing for the two-
week lead time required for oats, to meet the net requirements in Step 3.
These calculations are summarized in Figure 4-17. This view of the data is frequently
called an MRP record, which is the standard way of viewing the MRP process on paper.

Oats Lead time = 2 weeks Week 1 Week 2 Week 3 Week 4 Week 5
MPS NRG-A 984 984 984 984 1037
(cases) NRG-B 422 422 422 422 444
MPS NRG-A 142 142 142 142 149
(500 lb. batches) NRG-B 61 61 61 61 64
Gross requirements (lb) 57,850 57,850 57,850 57,850 60,700
Scheduled receipts 44,000 44,000
Planned receipts 88,000 44,000 44,000
On hand 29,650 15,800 1,950 32,100 18,250 1,550
Planned orders 88,000 44,000 44,000
Source Line: Course Technology/Cengage Learning.

FIGURE 4-17 The MRP record for oats in NRG bars, Weeks 1 through 5

The first two rows of the MRP record are the MPS that was the output from the
demand management step (shown in Figure 4-14). These NRG production quantities are
shown in terms of shipping cases. The first step is to convert the MPS from shipping cases
to 500-pound batches. Each shipping case weighs 72 pounds (not including packaging), so
to convert shipping cases to 500-pound batches, multiply the number of shipping cases by
72 pounds per case, and then divide by 500 pounds per batch. Thus, producing 984
shipping cases of NRG-A bars in Week 1 of the year will require 142 batches, as shown in
the third row of Figure 4-17.
The next row in Figure 4-17 is Gross requirements. The Gross requirements figures
are calculated by multiplying the MPS quantity (in production batches) by the pounds of
oats needed for a batch of snack bars. Fitter uses 300 pounds of oats per batch of NRG-A
bar and 250 pounds of oats per batch of NRG-B bar. This information is derived from the
BOM (Figure 4-16). Therefore, for Week 1, Fitter needs:
• NRG-A: 142 batches × 300 lb. per batch = 42,600 lb. oats
• NRG-B: 61 batches × 250 lb. per batch = 15,250 lb. oats
• Total = 57,850 lb. oats
The next row in Figure 4-17 is Scheduled receipts. This row shows the expected
timing of orders of materials that have already been placed, meaning that the supplier has

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