Page 73 - Orlicky's Material Requirements Planning

54 PART 2 Concepts

roller chain is manufactured on assembly lines, whereas sprockets are manufactured in
job shops. And the length of chain is not directly related to the size of the sprockets.
Furthermore, chain and sprockets can be purchased from the same or different manufac-
turers. Such mixed demand arises in cases of parts used in current production as well as
spare-part service. The independent portion of the total demand then has to be forecast
and added to the (calculated) dependent demand. Service parts no longer used in current
production are subject to independent demand exclusively, and this demand is properly
forecast provided that history is an accurate indicator of the future.
In manufacturing operations, the typical relationship between individual items that
make up the inventory is as depicted in Figure 4-2. Material conversion stages create the
relationship between raw material, semifinished part, component part, subassembly, and
assembly, each of which carries a unique identity (part number) and as such represents
an inventory item in its own right that must be planned and controlled. Demand for all
these inventory items is being created internally as a function of scheduling the next con-

FIGURE 4-2
Material
conversion
stages.

(Part A)
Transmission

Gearbox (Part B)

(Part C)
Gear

(Part D)
Forging Blank

(Part E)
Forging Steel