Supply Chain Analytics: Understanding MRP Procedure and Results

This article explains the MRP procedure and results in supply chain analytics. It includes an excel file and references for further reading.

SUPPLY CHAIN ANALYTICS1
Supply chain analytics
By (Name)
Course
Instructor’s Name
Institutional Affiliation
The City and State
The Date
Link to excel file
https://jmp.sh/fnkoiQC

SUPPLY CHAIN ANALYTICS2
MRP records for both products
MRP involves all items in the planned markets except the ones that contain the MRP
planning code. It also includes items in the input demand schedules and all components of MRP
planning code. Items in the input supply schedules and DRP planning code are also looked at
while compiling MRP (Steve 2018).
The MRP procedure
The procedure of MRP comprises of orders of customers together with the independent
demand predictions. These are vital in determining the requirements of each and every end
product per category. To effectively determine the on hand and on order inventory, the lead time
is efficiently offset. After that it is easily to effectively determine the production schedule and
MRP. Further, to effectively determine the components at lower levels, the MPS is effectively
put into the MRP to ease the overall process (Jacoby 2009).
Given the planned order release with the level of BOM explosion, the gross requirements
of the components can be determined. The difference between the scheduled receipts and on
hand inventory gives the net requirements for each time commodity.

SUPPLY CHAIN ANALYTICS3
Further, with effective lot size consideration, it is easy for there to be transformation of
net requirements and put into the planned order receipts. The above receipts are present in every
time and period.
It is easy for the MRP to provide the results of the current time following the shift of the
lead time. The above results into an effective shift from planned order receipt. For purposes of
attaining the gross requirements the above procedures are continuously undertaken up to the
point when there is exploration of the POR to attain the components overall gross requirements
(Steve 2018). To effectively determine the net requirement, the procedure of MRP is followed.
(N R)= (GR) – (AI).
But also, the available inventor for the first period is;
(AI) = inventory at hand or on hand + first period scheduled receipts minus Allocations
minus stock safety minus backorders (Jacoby 2009).
And for the other periods,
AI = last period end projected available balance + current period scheduled receipts.
Calculation of the positive NR( net requirements ) signifies NR of the same period net
item. In the above instances, the overall stock safety is high compared to the likely end period on
hand balance (Jacoby 2009). A number of objectives to the market are enshrined in the MRP.
These include eliminating or cutting the cost of inventory.
Excessive inventory costs are minimized through the provision of effective and right
material quantities at a specific time period for purposes of attaining the scedule of production.

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With the use of MRP it is easy to effectively attain the schedule of delivery. by reducing the time
delays in the material management and decision product making. It also helps to improve the
performance. It is done by reducing the unplanned inventory while focusing on components that
are available at the right time and place.
Explanation of the results
The results show that the product A is the independent product that involves the parent
commodity. It means that when product A is demanded, there has to be another product to
supplement it. Also, product F is the dependent product which means it cannot be consumed with
other products (Steve2018)

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References
David Jacoby.2009. Guide to Supply Chain Management: How Getting it Right Boosts
Corporate Performance (The Economist Books), Bloomberg Press; 1st edition, ISBN 978-
1576603451
Evans, Steve.2018. "Business models and supply chains for the circular economy".
Journal of Cleaner Production. 190: 712–721. doi:10.1016/j.jclepro.2018.04.159. ISSN 0959-
6526.