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ACC Limited.
Material Requirement
Planning
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ACC Limited
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Introduction to MRP
MRP is scientific technique for Planning the
ordering & usage of Material at Various level of
Production
MRP is Based on the concept of Independent &
dependent demands
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ACC Limited
Classified: INTERNAL USE ONLY Goods Return to Warehouse
Introduction to MRP
Consumption-based MRP determines whether and
when a material should be procured.
MRP determines :
Which type of material is needed ?
At which quantity the material is needed ?
When the material is needed ?
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ACC Limited
Classified: INTERNAL USE ONLY Goods Return to Warehouse
Benefits From MRP
Reduction In Inventory
Improved Cash Flow
Better Financial Planning
Better Customer Service
Regularizes the Production Activity
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ACC Limited
Classified: INTERNAL USE ONLY Goods Return to Warehouse
Material Requirement Planning
MRP is used for Planning Finish Materials or any
Important sub-assembly
MRP is Based on current or future sales. Planned
requirement Quantities trigger requirement qty of
Raw Materials
In MRP requirement elements are sales order
Planned order, Reservations & so on.
Dependent req will be created by BOM explosion
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ACC Limited
Classified: INTERNAL USE ONLY Goods Return to Warehouse
Lot Size Calculation
Lot size in ACC
EX Lot-for-lot order quantity

FX Fixed order quantity

HB Replenish to maximum stock level.


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Lot Sizes
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Re-order Point Procedure
In re-order point MRP type, when the current stock
level falls below the pre-set re-order point, stock
item must be procured at which quantity will be
specifically determined in accordance with the
agreed Lot Size parameter
Date the material will be available for use is
calculated from
Current date (date of MRP running) + Purchasing
department processing time + Planned delivery time +
Goods receipt processing time
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ACC Limited
Classified: INTERNAL USE ONLY Goods Return to Warehouse
Re-order Point Concept
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The reorder point calculation formula
ROP
SAP
= (D x LT) + S S
D = Average consumption during Replenishment Lead Time
LT = Replenishment Lead Time
SS = Safety Stock
Re-order Point Concept
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ACC Limited
Classified: INTERNAL USE ONLY Goods Return to Warehouse
IN ACC FOLLOWING COBINATION OF
MRP TYPE AND LOT SIZE
WILL BE USED AS PE BLUE PRINT
SPARES PARTS - MRP TYPE PD AND LOT SIZE EX
RAW MATERAIL - MRP TYPE V1 AND LOT SIZE FX
CONSUMABLE - MRP TYPE V1 AND LOT SIZE HB
DEMAND = REQUIREMENT /DAY X LT REQUIRED TO
PROCURE MATERAIL
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ACC Limited
Classified: INTERNAL USE ONLY Goods Return to Warehouse
The function of material requirement planning is
to guarantee material availability on time and in the required
quantity.
To determine & Eleminate situations of material shortage.
MRP analyzes the (requirements) demand in demand
management, if stock is needed, a planned order is created.
A planned order consists of a suggested order quantity, a
start and finish date.
In order to procure stock, we must convert the planned order
to a process order (in the case of in-house production), or to
a purchase requisitions (in the case of external procurement)
MRP : Summary