• MRP Terminology

    The different MRP Terminologies which are mainly used are

    Dependent demand: The demand for an item depends on another item. The demand dependency is the degree to which the demand for an item is associated with demand for another item. MRP helps to identify all the dependency and controls the order for each item in the proper manner.

    Lot Size: Refers to the quantity of items required for each order. The Lot size depends on the demand of particular product at a certain time and the cost of acquiring the same.

    Time phasing: Scheduling to produce or receive an appropriate amount of material so that it will be available in time periods when required.

    Time bucket: The time period used for planning purposes in MRP.

    Gross Requirements: The overall quantity of an item needed at the end of the period to meet the planned output levels or the forecast demand for any item.

    Net requirements: The net quantity of an item that must be acquired to meet the schedule output for the period in order to avoid any stock outs. It is calculated as

    Net Requirements = (Gross Requirement- Schedules receipts for the period) – Amount available from the previous period.

    Scheduled Receipts: The quantity of an item and the time of receipt which will be received from the supplier as a result of some order placed previously for the same.

    Planned Order receipts: The quantity of an item planned to be received from the supplier during each period so that there won’t be any stock outs.

    Planned order release: It is a planned release of orders to the suppliers so that the products will be received on schedule considering the lead time.

    Lead Time Offset: The supply time or number of time buckets between releasing an order and receiving the materials.

    Post Tagged with

Leave a Reply

Your email address will not be published. Required fields are marked *