This Article explains the process MRP goes through to optimize the on hand inventory to the requirements.
First it finds how many requirements there are for each MRP, not the quantity but just the number of requirements and then the requirements are processed from the lowest to the highest number of requirements. In this example the requirements are as follows:
AVL Number of Requirements
AVX 1
DALE 2
KOA 1
Panasonic 2
Genr 3
At this Point there are only 2 Inventory Parts with Inventory
AVL On Hand Qty
KOA 24,000
Genr 8,472
Because the KOA is a specific requirement the KOA requirements are process before the GENR and the inventory is consumed by this requirement.
MRP Requirements
Date Needed Qty Approved AVL's On-hand Balance
05/05/11 24,000 All AVL's Approved -0-
After all of the KOA inventory has been appplied to the requirements, then the GENR is process and applied as below:
MRP Requirements
Date Needed Qty Approved AVL's On-hand Balance
07/26/10 8,472 Genr. Dale -0-
08/27/10 MRP Instructing User to Release PO for qty of 3,000 (Genr)
08/27/10 3,000 Genr, Panasonic -0-
The GENR inventory is consumed by the 7/26/10 requirement so MRP is instructing the user to release a PO to meet the (Genr) requirement of 3,000 on 8/27/10.
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