Page 128 - Orlicky's Material Requirements Planning

CHAPTER 6 The Material Requirements Planning System 107

FIGURE 6-7
Period
Timing of a gross
requirement. Gear (Parent) 1 2 3 4 5 6 7 8
Planned-Order Releases 80

Forging (Component)
Gross Requirements 80

puter program that controls the requirements computation. The subject of lot sizing will
be reviewed in Chapter 8.
The general rule of MRP logic can be stated as follows: The mutual parent-compo-
nent relationship of items on con tiguous product levels dictates that the net requirement
on the parent level, as well as its coverage by a planned order, be computed before the
gross requirement on the component level can be determined correctly. The tim ing of a
gross requirement for a component item coincides with the timing of an order release
planned for its parent, as shown in Figure 6-7.

Item Lead Times
Lead times of the individual inventory items are a complicating factor in the computa-
tion of material requirements. The preceding example of net requirements determination
for forgings, gears, and so on was oversimplified in ignoring, among other things, item
lead times. It is these lead times that will determine the timing of releases and scheduled
completions for the orders in question. Because a component-item order must be com-
pleted before the parent-item order that will consume it can be started, the back-to-back
lead times of the four items in the example make up the cumulative lead time, a sort of
critical path that determines the earliest time that the end products could be built or,
given the end-product schedule date, the latest time for the start of the lowest-level item
order. Cumulative lead time is represented graphically in Figure 6-8. See also the discus-
sion of lead time in Chapter 4.
If the manufacturing lead times for the four items in the example were
Forging blank D: 3 weeks
Gear C: 6 weeks
Gearbox B: 2 weeks
Transmission A: 1 week
12 weeks (cumulative lead time)
and assembly of the end product, truck X, were scheduled for a date arbi trarily desig-
nated as week 50, component-order release dates and comple tion dates could be calcu-
lated by successively subtracting the lead-time values from 50: