Page 142 - Orlicky's Material Requirements Planning

CHAPTER 7 Processing Logic 121

FIGURE 7-2
Period
Gross Total
requirements 1 2 3 4 5 6 7 8
schedule.
Gross Requirements 20 25 15 12 72

Net Requirements

Assume that there are 23 units of this item on hand and 30 on order and due in period 3.
This is displayed in time-bucket format in Figure 7-3.

FIGURE 7-3
Period
Time-phased Total
status before net 1 2 3 4 5 6 7 8
requirements
computation. Gross Requirements 20 25 15 12 72
Scheduled Receipts 30 30
On Hand 23

The logic of the net requirements computation is simple:

Gross requirements
minus Scheduled receipts
minus On hand
equals Net requirements

In using this formulation, it is understood that if the result is a negative value, that
is, if the sum of quantities on hand and on order exceeds the gross requirement, the net
requirement is zero. With data in time-phased format, the calculation is performed suc-
cessively for each period, and unapplied inventory is carried forward. This is shown in
Figure 7-4.

FIGURE 7-4
Gross Scheduled Net
Calculation of net Period requirements receipts On hand Result requirements
requirements.
1 0 –0 –23 = –23 0
2 20 –0 –23 = –3 0
3 0 –30 –3 = –33 0
4 25 –0 –33 = –8 0
5 0 –0 –8 = –8 0
6 15 –0 –8 = 7 7
7 12 –0 –0 = 12 12
8 0 –0 –0 = –0 0
Totals 72 30 19