Question

How do the concepts of master production scheduling and material requirements planning translate to service organization? Provide an example.

Answer 1

Material Requirement Planning (MRP) :

It is an information system that translates the finished product requirements of the master schedule into time phased requirements for subassemblies, component parts and raw materials, working backwards from due date using lead time and information to determine when and how much to order. Hence requirements for end items generate requirements for lower level component, which are broken down by planning period so that ordering, fabrication and assembly can be scheduled for timely completion of end items while inventory level are kept reasonably low.

Purpose of MRP are as follows:

1. Control inventory level.

2. Assign operating priorities for items.

3. Plan capacity to load the production system.

Master Production Scheduling (MPS):

It is very important to prepare master plan scheduling before starting the production functions. The tabular representation of aggregate production plan is called Master Production Scheduling and it highlights the production process quantity, quality, timing of production etc.

From the following queries the MPS is prepared in an organisation.

1. What to produce?

3. How much to produce?

3. When to produce?

4. What product mix be?

Example: For a hotel might result in estimates of the work hours(standard cleaning time per occupied room) and materials(soap, cleaning fluid, shampoo, towel, bottled water etc) required per day over the planning horizon. The MPS would be the number of cleaned rooms per day over a planning horizon. Bottom line- service organizations can make use of the concept and logic of MPS and MRP to estimate resource capacity(I.e. Labour, truck, equipment) and materials required by time period.