MRP theory

bull-whip effect

small order changes in downstream demand lead to large upstream variation -> high unwanted inventories

lumpy demand effect

Rip systems not first for unexpected, high demands

unreliability effect

FG product consists of 5 parts, each of availability of 95%, then FG availability 77%

BOM

bills of material

special BOMs

modular bills, planning bills, phantom bills (used for subassies that exist temporarily

MRP requirements

computer system necessary, mainly discrete products, accurate bill-of-material, accurate inventory status, stable lead time, problem with frequent re-planning

Four periods in the Rolling MPS

Frozen - until week 4, new orders cannot enter and we can't change them; Firm - orders confirmed by customers; Full - we can shift things; Open - we can still assemble orders, we don't have to plan yet