Overview
MRP Policies dictate the variables used in the MRP Planning process. Many of the individual fields default from the Inventory Commodity Code and may be changed; however, the main purpose of the Inventory Commodity Code feature is to populate these fields as a standard default to ensure uniformity within groups of items.
Fields
Planning Policy: The MRP Planning Policy indicates the method MRP Planning will use when generating the material plan.
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Days Cover: MRP Planning will combine demand quantities across multiple days to create a single planned supply order as part of the plan.
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Lot for Lot: For each demand, MRP Planning will create a planned supply order as part of the material plan. The MRP Planned Order Quantity will be determined based on net demand and the Minimum Order Quantity, and Safety Stock Quantity. The Policy Quantity for Lot for Lot is always ‘1’.
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No MRP Planning: MRP Planning ignores this item.
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Re-order Point: MRP Planning will create a planned supply order for reorder point Items when the balance drops below the Re-order point.
Policy Quantity: The MRP Policy Quantity values work in conjunction with specific MRP Plan Policies. The quantities established here will determine the planned supply order quantity created by MRP Planning.
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Days Cover: When the MRP Plan policy is Days Cover, the MRP Policy Quantity value represents the number of days into the future from the earliest demand to determine the MRP planned supply order Quantity.
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Lot for Lot: When the MRP Plan Policy is Lot for Lot, the MRP Policy Quantity defaults to 1 and cannot be changed. Under these settings, MRP Planning will create a planned supply order to exactly meet each specific demand.
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No MRP Planning: MRP Planning excludes the Item from MRP planning. The demand is calculated; however, no supply order is planned. Under this selection, the MRP Policy Quantity is not applicable.
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Re-Order Point: Using the Re-order Point Policy, the MRP Policy Quantity value represents a fixed quantity for MRP Planned supply orders. Use the Safety Stock field to set the Minimum Inventory level for the item (which is then the actual Reorder Point) and use the MRP Policy Quantity to specify the MRP Planned Order quantity. When inventory falls below the safety stock level, MRP will create a planned order for the quantity in the MRP Policy Quantity field.
Minimum Quantity: This value is the minimum quantity for which MRP will plan an order. If the value is set to 10 and the demand is for less than 10 but more than 0, the MRP Planned Order will be for the minimum quantity of 10. When the demand is greater than the Minimum Quantity, the actual demand quantity is planned up to the Maximum Quantity specified.
Maximum Quantity: This value represents the maximum order quantity MRP will plan for each supply order. When more than the Maximum Quantity is required, MRP will plan additional supply orders, up to the Maximum Quantity for each order, until the entire requirement is planned.
EXAMPLE
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Consider the On-Hand quantity of the Item is 2, the Safety Stock Quantity is 10, and the Maximum Quantity is 20.
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The MRP plans 5 supply orders, each with a quantity of 20.
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The total quantity planned is 5 * 20 = 100.
Supply Multiplier: This field defines a Supply Multiplier used when new supplies (Work Orders and Requisitions) are created during MRP Launch. Just prior to creation, the supply quantity will be adjusted up as necessary to be a multiple of this value. This adjustment does not affect MRP calculations, it is only applied once the supply is calculated, to accommodate the Supply Multiplier value. This is most effective for items that are planned Lot-Lot as Days Cover planning will round up supply quantities leaving potential overages from each supply. When checked, it defaults from Inventory Commodity Code but can be overridden.
NOTE In effect, this field does not affect the number of planned Work Orders or Inventory Requisitions that are created after running MRP. The rounding logic within this field does not apply to supplies created from any other place outside of MRP (i.e. UI, CSV imports, etc).
Safety Stock Quantity: MRP planning will plan an order to bring the inventory level up to the Safety Stock Quantity. A new order will be planned when the on-hand balance goes below the safety stock quantity.
EXAMPLE 1
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Consider the On-Hand quantity of the Item is 4, the Safety Stock Quantity is 10, and the Supply Multiplier is 15.
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The MRP plans a supply order for a quantity of 15.
EXAMPLE 2
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Consider the On-Hand quantity of the Item is 4, the Safety Stock Quantity is 20, and the Supply Multiplier is 15.
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The MRP plans a supply order for a quantity of 30 (15*2).
Yield: This field is included in the MRP calculation to adjust the MRP planned quantity by the anticipated loss of this item during the manufacturing process. The yield factor is the percentage of the component that survives the manufacturing process. It is expressed as a number between 0 and 1. A yield factor of 0.90 means that only 90% of the usage quantity of the component actually survives to be incorporated into the finished assembly. A yield of less than 1 increases the quantity planned (New Qty=Ord Qty/Yield). The yield factor applies directly against all components and charges used to manufacture the finished product, while the scrap percentage is only used for individual components of the final product.
EXAMPLE A .75 yield will cause the system to plan an order 33% greater than the quantity ordered. New Qty = Ord Qty/Yield = 100/.75 = 133.33.
Include in Usage Forecast Run: When checked, the item will be included in the Usage Forecast; if unchecked, the item will not be included in the Usage Forecast.
Use Consolidated Requirements: When checked, Requirement records (ICIXR) will be consolidated where the Division, Item, Project, Order Type, and Date Required are the same. This consolidation is done to a Summary Requirement record (ICIXRS), which MRP will then use for planning.
SEE ALSO
Inventory Item Master
Inventory Commodity Code
