In Material Requirements Planning (MRP), net requirements refer to the actual quantity of materials needed for production after considering existing inventory and scheduled receipts. Essentially, net requirements are the difference between the total required quantity of an item and the available supply, ensuring that enough materials are available for production without overstocking.
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Bills of material are among the most crucial inputs in material requirements planning. There are many different types of bills of material. Establishing, managing your bills of material and keeping them up to date will make building items much more effective. It will prevent defects and help avoid over processing waste. So, what is a bill of materials?
Dependent demand is the demand that is directly related to or derived from the bill of materials structure for other items or end products which are independent demand.
A sequential ordering system is a method of assigning unique identifiers to items, transactions, or records in a sequential numerical order. This system is often used in inventory management, manufacturing, and various administrative processes to maintain a clear, straightforward, and easy-to-follow sequence.
Manufacturing lead time is different than lead time. Manufacturing or production lead time is the total amount of time it takes to "manufacture" or "produce" an item.
A changeover is the work required to change a specific machine, resource, work center or line from making the last good piece of an item to making the first good piece of another item. That means that if the first good piece after the changeover is not good the changeover is not complete.
A single-level bill of materials is one level of an assembly and does not include any lower-level subassemblies. It displays only one level of components that would be used in their direct parent item.
One element of holding costs is risk. Risk costs are the risk that is assumed when inventory is acquired. In addition to this risk costs refer to loss of inventory value. This is often referred to as the shrinkage that occurs within inventory.
Synonym: Manufacturing Lead Time.
Pegging reports are used in both material requirements planning and the master production schedule. In manufacturing, a pegging report is a record that shows the relationship between demand and supply.
Strategy is defined as a plan or method chosen to bring about a desired future. Such as; the achievement of a goal, objective, countermeasure or solution to a problem.
The goal of the Master Production Schedule (MPS) is to balance supply with demand by period, which is often referred to as planning horizon. Your production and items coming in from your supply chain is your supply, and the forecast or confirmed sales is your demand. The Master Production Schedule outlines which items need to be produced, in what quantity and when. The MPS does not go into detail regarding the operations or tasks.
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June 2024
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