National Institute of Technology Calicut Department of Mechanical Engineering

MRP: Some solved problems

1. Assume that product Z is made of two units of A and four units of B. A is made of three
units of C and four units of D. D is made of two units of E. Lead time for the final
assembly Z is two weeks; A, B, C, and D take one week each; and E takes three weeks.
Fifty units of the final assembly Z are required in period 10. Assume that there is
currently no inventory on hand for any of these items. Lot-for-lot lot sizing method is
used for all items. Develop the product structure tree. The end item is Z, and to produce
this item, 2 weeks required when first level items are available. A requirement in week 10
for this item is 50 units. Prepare the MRP schedule.

Answer:

Product structure tree

A B
(2 required) (4 required)

C D
(3 required) (4 required)

E
(2 required)

b) MRP schedule

The MRP records for dependent items are as follows:

Item No: A Lead time: 1 week, 2 Quantity Lot-sizing procedure: Lot-for-lot

Period 1 2 3 4 5 6 7 8 9 10
Gross requirement 50 × 2
Scheduled receipts
Projected on hand
Planned order releases 100

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Item No: B Lead time: 1 week, 4 Quantity Lot-sizing procedure: Lot-for-lot

Period 1 2 3 4 5 6 7 8 9 10
Gross requirement 50 × 4
Scheduled receipts
Projected on hand
Planned order releases 200

Item No: C Lead time: 1 week, 3 Quantity Lot-sizing procedure: Lot-for-lot

Period 1 2 3 4 5 6 7 8 9 10
Gross requirement 100 × 3
Scheduled receipts
Projected on hand
Planned order releases 300

Item No: D Lead time: 1 week, 4 Quantity Lot-sizing procedure: Lot-for-lot

Period 1 2 3 4 5 6 7 8 9 10
Gross requirement 100 × 4
Scheduled receipts
Projected on hand
Planned order releases 400

Item No: E Lead time: 3 weeks, 2 Quantity Lot-sizing procedure: Lot-for-lot

Period 1 2 3 4 5 6 7 8 9 10
Gross requirement 400 × 2
Scheduled receipts
Projected on hand
Planned order releases 800
2. One unit of A is made of three units of B, one unit of C, and two units of D. B is
composed of two units of E and one unit of D. C is made of one unit of B and two units of
E. E is made of one unit of F. Items B, C, E, and F have one week lead times. A and D
have lead time of two weeks.
Assume that lot-for-lot sizing is used for items A, B, and F. Lots of size 50, 50, and 200
are used for items C, D, and E, respectively. Items C, E, and F have on hand (beginning)
inventories of 10, 50 and 150 respectively. All other items have zero beginning inventory.
The quantity of various items scheduled to receive is as follows: 50 units of E in week
one, and 50 units of F in week one. There are no other scheduled receipts.
(a) Develop the product structure tree.
(b) If quantity of A required in week 8 is 20 units, determine the planned order releases
for all the items. Show the MRP record of all items.
Answer:

a) Product structure
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B (3) C D (2)

E (2) D B E (2)

F E (2) D F

20 units of A is required in week 8 and the lead time for A is 2 weeks.

b) Since there is part commonality among levels of the product structure, before preparing the
MRP record of dependent items, the record processing sequence has to be decided using low-
level code.

Item B C D E F
Low-level code 2 1 3 3 4
Record processing order is C – B – D – E – F

Item No: C Lead time: 1 week Lot size: 50

Period 1 2 3 4 5 6 7 8
Gross requirement 20
Scheduled receipts
Projected on hand 10 10 10 10 10 10 40 40 40
Planned order releases 50

Item No: B Lead time: 1 week Lot-sizing procedure: Lot-for-lot

Period 1 2 3 4 5 6 7 8
Gross requirement 50 20×3
Scheduled receipts
Projected on hand
Planned order releases 50 60

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Lead time: 2 weeks, 2 quantity

Item No: D Lot size: 50
for A
Period 1 2 3 4 5 6 7 8
Gross requirement 50 60 20×2
Scheduled receipts
Projected on hand 10 10 10
Planned order releases 50 60 50
Note: Since the week 5 net requirement is greater than lot size, the order size is taken as net
requirement.

Item No: E Lead time: 1 week, 2 quantity Lot size: 200

Period 1 2 3 4 5 6 7 8
60×2+
Gross requirement 50×2
50×2
Scheduled receipts 50
Projected on hand 50 100 100 100 0 0 0 0 0
Planned order releases 220
Note: Since the week 5 net requirement is greater than lot size, the order size is taken as net
requirement.

Item No: F Lead time: 1 week Lot-sizing procedure: Lot-for-lot

Period 1 2 3 4 5 6 7 8
Gross requirement 220
Scheduled receipts 50
Projected on hand 150 200 200 200 0 0 0 0 0
Planned order releases 20

3. Prepare the MRP records for the dependent items shown in the product structure given in
Figure 1. The manufacturing lead time of item A is one week. The MPS of A is given in
Table 1. Current inventory status of items B, C and D, and other information required for
MRP computation are provided in Table 2. The MRP record must be prepared
considering MPS of A for the periods starting from period 2 to 6.

A Periods 1 2 3 4 5 6
Quantity 0 10 18 8 12 22
Table 1: MPS for A
C B (2 units required)

Item B C D
D
Lead-time 2 1 2
Fig. 1 Product Structure Lot size 40 20 25
Initial
20 20 30
Inventory
Scheduled 40 units each in 20 units in 25 units in
receipt periods 1 and 2 period 1 period 1
Table 2: Details Required for MRP Record Preparation

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Answer

MPS of item A
Period 1 2 3 4 5 6
Quantity 0 10 18 8 12 22
It is assumed that MPS quantity is the quantity of A required to meet the demand in the
specified periods. The requirement for components of A then should be offsetted by one
week.

Item No: B Lead time: 2 weeks Lot-size: 40

Period 1 2 3 4 5 6
Gross requirement 10×2 18×2 8×2 12×2 22×2
Scheduled receipts 40 40
Projected on hand 20 40 44 28 4 0 0
Planned order releases 40

Item No: C Lead time: 1 week Lot-size: 20

Period 1 2 3 4 5 6
Gross requirement 10 18 8 12 22
Scheduled receipts 20
Projected on hand 20 30 12 24 12 10 10
Planned order releases 20 20

Item No: D Lead time: 2 weeks Lot-size: 25

Period 1 2 3 4 5 6
Gross requirement 40
Scheduled receipts 25
Projected on hand 30 55 55 15 15 15 15
Planned order releases

4. An MRP record is given below.

Period
1 2 3 4 5 6 7
Gross requirements 16 40 45 30 40 10
Scheduled receipts 20
Projected available balance 4 8 0 0 0 0 0 0
Planned order release 32 45 30 40 10
Lead time = 1 period
Lot size = Lot-for-Lot
Fig 1: MRP Record of an item

(a) The record in Figure 1 shows the correct details in the beginning of the week 1. During week 1,
the following information is received about this item: The demand in the first period was 12 units
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instead of 16 units. There is a change in the gross requirement of the item in second period and
the change is that the gross requirement is reduced by 3 units. There is a service part demand of
20 units identified for this item in 4th period and 8th period demand is 15 units. Show the record of
this item after rolling through time. [3]
(b) For the MRP record shown in Figure 1, it is planned to introduce a safety stock of 10 units. Also,
there is a service part requirement of 20 units for this item in week 5 which is not included in the
record shown in Figure 1. Reconstruct the record to show the effect of safety stock and demand
for service part. [2]
(c) The MRP record shown in Figure 1 is for an item say X, which is made from the assembly
of two items say A and B. One unit of X to make one unit of A and two unit of B are
required. Give the details of order launching and availability check issues associated with
the quantity in the action bucket of the record shown in Figure 1. [2]

Answer:
a)
Period
2 3 4 5 6 7 8
Gross requirements 37 45 20 30 40 10 15
Scheduled receipts 32
Projected available balance 12 7 0 0 0 0 0 0
Planned order release 38 20 30 40 10 15
Lead time = 1 period
Lot size = Lot-for-Lot
b)

Period
1 2 3 4 5 6 7
Gross requirements 16 40 45 50 40 10
Scheduled receipts 20
Projected available balance 4 8 10 10 10 10 10 10
Planned order release 42 45 50 40 10
Lead time = 1 period, Safety stock = 10
Lot size = Lot-for-Lot
In the beginning, sufficient inventory is not available for safety stock, so the planned order
release of the current period is adjusted to account for safety stock and the minimum
inventory planned to maintain in the subsequent period is safety stock quantity. (We usually
assume that first period is the current period and the beginning inventory of current period is
the quantity available on-hand. This quantity cannot be altered.)

c)
Period
1 2 3 4 5 6 7
Gross requirements 16 40 45 30 40 10
Scheduled receipts 20
Projected available balance 4 8 0 0 0 0 0 0
Planned order release 32 45 30 40 10
Lead time = 1 period
Lot size = Lot-for-Lot

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The above record is the record of X. There are 32 units in action bucket. The MRP planner
has to release an order for 32 units of X to manufacture. Before releasing the order, the
planner has to check for the availability of children A and B. The quantity of A required is 32
units and the quantity B required is 64 units. If these quantities are available, allocate these
quantities for the manufacture of X. After this allocation the order can be released.

5. A typical MRP problem – Rolling through time and allocation check

The product structure diagram of an end item ‘A’ is given in Figure 1 and its MPS is shown
in Figure 2. The lead time for this item is 2 weeks.
a) Prepare a Material Requirements Planning (MRP) record for the dependent demand items
(B and C) and discuss about actions already taken based on the scheduled receipt in
various records. MRP planning factors, inventory status and status of scheduled receipt
for the items are given in Table 1. This table shows the status of items which does not
include allocated quantities.
b) Assume that week 1 activities have happened as planned in MRP record of items ‘B’ and
‘C’ and this period is passed. The scheduled receipt to be received in the beginning of
period 2 is received at the end of period 1 and before generation of records of period 2
onwards. The records are regenerated after rolling through time. There is no gross
requirement for this item in the week 15.
c) Consider the MRP record of items after rolling through time. Describe the activities of the
planner with respect to item C in the beginning of week 2. Show the effect of actions
taken on the MRP record. (That is, show the record regenerated after the actions taken.)

C B
(2 required)

Fig. 1: Product Structure Tree for A

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MRP: Some solved problems April 2020
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Week
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Forecast 30 30 20 20 30 30 30 30 25 25 30 40 50 40
Orders 25 15 12 20 35 20 35
Available 10 30 10 40 55 25 45 15 30 55 25 35 35 45
Available to promise 15 23 25 0 50 15 50 50 50 50
MPS 50 50 50 50 50 50 50 50 50
Scheduled receipt 50
Planned order release 50 50 50 50 50 50 50 50
On-hand - 40
Fig. 2: MPS Record for item A

Table 1: Details for MRP record preparation

Item Initial Scheduled Safety Lot Lead

Inventory Receipt Stock Size Time
B 10 100 in period 2 10 L4L 1
C 25 150 in period 2 20 L4L 1

Answer
Answer for (a)
Low level codes for items in Product structure of end item A are as follows:
Item B C
Low level code 1 2
Where used data for B: A
Where used data for C: used in A which is at low level code 0 and in B which is at low
level code 1. That is, record of A and B should be ready before processing the record of C.
A is an end item and hence MPS record is sufficient.
B is a dependent demand item and hence its MRP record is to be prepared before
preparing the record of C.
MRP record of B
Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14
GR -- 100 100 -- 100 -- 100 100 -- 100 100 100 -- --
SR -- 100
PAB 10 10 10 10 10 10 10 10 10 10 10 10 10 10
POR -- 100 -- 100 -- 100 100 -- 100 100 100 -- -- --
On-hand = 10 L4L Lead time = 1 Safety stock = 10

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MRP record of C
Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14
GR -- 150 50 100 50 100 150 50 100 150 150 50 -- --
SR -- 150
PAB 25 25 20 20 20 20 20 20 20 20 20 20 20 20
Net
-- -- 45 100 50 100 150 50 100 150 150 50 -- --
requirement
POR 45 100 50 100 150 50 100 150 150 50
On-hand = 25 L4L Lead time = 1 Safety stock = 20
Note: Net requirement row can be added to the general format for MRP record. Here one
such format for MRP record is used.

Interpretation based on MPS record of A, and MRP records of B &C (Decisions are
already taken for the scheduled receipt shown in records and these decisions are discussed
below.)
• To produce 50 units of product A in period 2 (scheduled receipt in period 2 = 50 units,
see MPS record of A), various items allocated are 50 units of C, and 100 units of B.
• To produce 100 units of part B in period 2 (scheduled receipt in period 2 = 100 units, see
MRP record of B), the allocated quantity of C is 100 units.
• C is a purchased item and hence no inventory allocation for the scheduled receipt of this
item.
Answer for (b)
MRP record of B after rolling for week 1
Week 2 3 4 5 6 7 8 9 10 11 12 13 14 15
GR 100 100 -- 100 -- 100 100 -- 100 100 100 -- -- --
SR
PAB 10 10 10 10 10 10 10 10 10 10 10 10 10 10
POR -- 100 -- 100 -- 100 100 -- 100 100 100 -- -- --
On-hand = 110 L4L Lead time = 1 Safety stock = 10

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MRP: Some solved problems April 2020
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MRP record of C after rolling for week 1

Week 2 3 4 5 6 7 8 9 10 11 12 13 14 15
GR 150 50 100 50 100 150 50 100 150 150 50 -- -- --
SR
PAB 25 20 20 20 20 20 20 20 20 20 20 20 20 20
Net
-- 45 100 50 100 150 50 100 150 150 50 -- -- --
requirement
POR 45 100 50 100 150 50 100 150 150 50 -- -- -- --
On-hand = 175 L4L Lead time = 1 Safety stock = 20

Decisions/activities based on record of C

• Planner’s first action would be to try to launch the planned order for 45 units in period 2
➢ It is a purchased item and hence availability check and allocation are not required
➢ Issue an order to the purchase section to purchase 45 units
➢ Remove the 45 units from the planned order release
➢ Create a scheduled receipt for 45 units in week 3

MRP record of C after implementing above decisions

Week 2 3 4 5 6 7 8 9 10 11 12 13 14 15
GR 150 50 100 50 100 150 50 100 150 150 50 -- -- --
SR 45
PAB 25 20 20 20 20 20 20 20 20 20 20 20 20 20
Net
-- -- 100 50 100 150 50 100 150 150 50 -- -- --
requirement
POR 100 50 100 150 50 100 150 150 50 -- -- -- --
On-hand = 175 L4L Lead time = 1 Safety stock = 20

**** End of document****

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MRP: Some solved problems April 2020