Page 140 - Orlicky's Material Requirements Planning

CHAPTER 7 Processing Logic 119

its due date to arrive at the order release date. The actual span of time might be more than
five weeks if holidays or a plant vacation hap pened to intervene.

Dates and Time Buckets

In an MRP system, inventory status data are time phased by associating them with either
days (relatively short time periods) or planning periods such as weeks or months (rela-
tively long time periods). While the specific method of time phasing that is being
employed will de termine the terms in which the internal arithmetic is carried out by the
system, the method of display of time-phased data can be selected independently. A given
day can be converted to its respective planning period for purposes of display, and a plan-
ning period can be expressed in terms of one of its constituent days, usually its starting
day. Figure 7-1 demonstrates how these data can be displayed by different time buckets.

FIGURE 7-1
Period
Row of different
1 2 23 24 25 26 Jul AugSepOct NovDec I II III IV
time values
display. Gross
Requirements 10 15 5 20 10 10 40 305050 50 30 120150150 100

MRP systems are designed in such a way that requirements and inventory data can
be entered, stored, and processed internally by date/quantity but displayed in time-
bucket format. Technological developments over the past 30 years have allowed MRP
systems to develop into ”bucketless” systems. The development of time buckets that cor-
respond to periods of time normally spanning more than a single day is no longer
required. This represents a rather coarse division of time. For this reason, the precise
meaning of the timing of data assigned to time buckets was fixed by convention.
Currently, MRP systems schedule to the day. Therefore, the logic of time buckets is no
longer necessary. In the following discussion of gross and net requirements, although
time periods can be a day, a week, a month, or a quarter, the common deployment in
MRP is that a period is a single day.

Planning Horizon
To ensure that MRP provides data on items at all levels in bills of material (BOMs), the
planning horizon at least should equal the largest total of item lead times (cumulative
lead time) in the critical (longest) path leading from raw material to the end item appear-
ing in the master production schedule (MPS). If planning horizons are too short, the
process of successively offsetting for lead time in level-by-level planning will run into
past periods when it reaches items on the lowest level. To ensure some forward visibility
of data on purchased items, planning horizons should be significantly longer than the
critical-path lead time.