Scribd
Upload
108 views5 pages

5 MRP

This document discusses different lot sizing techniques used in MRP (Material Requirements Planning) systems including lot-for-lot (L4L), economic order quantity (EOQ), and period order quantity (POQ). It provides examples of how each technique is used to determine planned order quantities over multiple periods based on net requirements and other factors like setup costs, unit prices, holding costs, and annual demand.

Uploaded by

Bhuvanes Kumar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
108 views5 pages

5 MRP

This document discusses different lot sizing techniques used in MRP (Material Requirements Planning) systems including lot-for-lot (L4L), economic order quantity (EOQ), and period order quantity (POQ). It provides examples of how each technique is used to determine planned order quantities over multiple periods based on net requirements and other factors like setup costs, unit prices, holding costs, and annual demand.

Uploaded by

Bhuvanes Kumar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 5

Lot sizing techniques used in MRP systems

Lot-for-lot (L4L) most used

Economic order quantity (EOQ)


Period order quantity (POQ)

MRP

Lot-for-lot (L4L) example


Period Net rqmts. Planned order (Assume LT) 1 35 35 2 10 10 3 4 40 40 5 6 20 20 7 5 5 8 9 Total 150 150 10 30 10 30

The L4L technique:


Minimizes carrying costs Is certainly the best method for - highly discontinuous demand - expensive purchased items
MRP 2

Economic Trade-off in Inventory Control

MRP

EOQ example
Setup cost, S = $100 Unit price, C = $50 Holding costs, HR = .24 per annum Annual demand, D = 200 EOQ = (2DS / CHR)1/2 = 58
Period Net rqmts. Planned orders Remnants 1 35 58 23 13 13
MRP

2 10

4 40 58 31

6 20

7 5

8 10 58

9 30

10

31

11

54

24

24
4

Period order quantity example


Technique:
1. Compute EOQ to determine number of orders per year 2. Divide number of periods in one year by number of orders to get ordering interval

EOQ = 58 Number of periods in one year = 12 D = 200 200 / 58 = 3.4 (orders per year) 12 / 3.4 = 3.5 (ordering interval)
Period Net rqmts. Planned orders 1 35 85 2 10 3 4 40 5 6 20 35 7 5 8 9 30 Total 150

10 30

MRP

You might also like