Page 143 - Orlicky's Material Requirements Planning

122 PART 2 Concepts

The correctness of the computation is verified by a check of totals as follows:

Total gross requirements: 72
minus Total scheduled receipts: 30
minus On hand: –23
equals Total net requirements: 19

This is illustrated in Figure 7-5 in time-phased record format. Under an alternative
method of calculating net requirements, the quantity on hand is time-phased, that is, pro-
jected into the future, period by period, and the first negative value then represents the
first net requirement. Differences between successive negative values equal the net
requirements in the re spective later periods.
The logic of the on-hand/net-requirements compu tation is as follows:
Balance on hand at the end of a given period
plus Quantity on order and due in the succeeding period
minus Gross requirements of the succeeding period
equals Balance on hand at the end of the succeeding period
Under this method, the “negative on hand” is understood to equal a net require-
ment, recorded cumulatively. The calculation is performed in Figure 7-6.
This method provides a more efficient display in that it combines the projected on
hand and the net requirements information in a single row of time buckets, as shown in
Figure 7-7. Although it may appear that the data, when presented this way, are more dif-

FIGURE 7-5
Period
Time-phased Total
status after 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
Net Requirements 7 12 19

FIGURE 7-6
On hand at On hand
beginning Scheduled Gross at end
Alternative Period of period receipts requirements of period
calculation of net
requirements. 1 23 +0 –0 = 23
2 23 +0 –20 = 3
3 3 +30 –0 = 33
4 33 +0 –25 = 8
5 8 +0 –0 = 8
6 8 +0 –15 = –7
7 –7 +0 –12 = –19
8 –19 +0 –0 = –19