welcome back after learning how to find the required number of items to assemble a certain number of end items and how to construct the assembly time chart which was explained in the previous two videos of this series you are ready now to make a material requirement plan before explaining how to create a material requirement plan subscribe to the channel and activate the alarm to be notified of the new videos the MRP can be created in this shown table which contains the following the gross requirement is the total expected demand for an item or raw material during each time period scheduled receipts are orders that have been placed and are scheduled to arrive from vendors or elsewhere in the pipeline by the beginning of a period projected on hand is the expected amount of inventory that will be on hand at the beginning of each time period or the scheduled receipts Plus available inventory from the last period the net requirement is the actual amount needed in each time period the plan order receipt is the quantity expected to be received by the beginning of the period in which it is shown here we have two options lot for lot ordering in which the ordered quantity equals the net requirements and lot size ordering in which the ordered quantity May exceed net requirements planned or release indicates a planned amount to order in each time period equals planned order receipts offset by lead time let us solve an example a firm that produces with shutters and bookcases has received two orders for shutters one for 100 shutters and one for 150 shutters the 100 unit order is due for delivery at the start of week 4 of the current schedule and the 150 unit order is due for delivery at the start of week 8. each shutter consists of two frames and four slided with sections though with sections are made by the firm and Fabrication takes one week the frames are ordered and the lead time is two weeks assembly of the shutters requires one week there is a scheduled receipt of 70 with sections at the beginning of week one determine the size and timing of planned order releases necessary to meet delivery requirements under each of these conditions one lot for lot ordering two lot size ordering with a lot size of 320 units for frames and 70 units for with sections the first step in solving such a problem is to construct the master schedule to learn how to make a master schedule click the above link it is given that 100 shutters are ordered and to be delivered at the start of week four so add 100 in week four another 150 shutters are ordered and to be delivered at the start of week 8. so add 150 in week 8. the second step is to create the product structure tree we know that each shutter consists of two frames and four-sided with sections so the product structure tree is like this after constructing the product structure tree we have to calculate the number of items needed to assemble 100 and 150 shutters for 100 shutters we need 200 frames as each shutter consists of two frames and 330 with sections are required because four with sections are required for each shutter and 70 with sections are scheduled to recede at the beginning of week one for the 150 shutters lot we need 300 frames and 600 with sections now let us construct the assembly time chart to know when to order the required individual items from the master schedule 100 shutters are required for delivery at the beginning of week four moreover the Assembly of the shutter takes one week which means that the assembly should be done in week three the Assembly of the shutter needs frames with a lead time of two weeks this means that the frame should be ordered at the beginning of week one of the wood section that is required for the shutter assembly needs one week to be produced so it should be finished during week two similarly for the 150 shutters that have to be delivered in week eight their assembly has to be finished in week seven the order of the frames has to be released at the beginning of week five and the with Section fabrication has to be done in week six now all the required information is ready to make the material requirement plan as you know the MRP is done in such a table we need to make three of these tables one for the shutter itself another for the frame and the third for the wood sections it is required to make the MRP in two situations the first one is lot for lot ordering this means that the plan Order release is equal to net requirements let us start with the shutter from the master schedule we know that 100 items are required in week four and another 150 are required in week eight write these quantities in weeks four and eight here in the given information there is no data for the shutter beginning inventory this means that the beginning inventory is zero so the gross requirements are 100 in week four and one hundred and fifty at week eight there is no schedule receipt as the firm produces this item nor projected on hand as there is no inventory so the net requirements are as the gross requirement of 100 shutters at week 4 and 150 at week eight consequently the planned receipt is 100 shutters at week four and 150 shutters at week eight we know from the assembly time chart that the shutter assembly has to be done in weeks three and seven So the plan Order release of the 100 and 150 shutters has to be in weeks three and seven now let us make another table for the frame it is known that to assemble the required lots of shutters 200 frames are required at the beginning of week three and another 300 frames are required at the beginning of week 7 as one shutter requires two frames so the gross requirements of the frames are 200 frames in week 3 and 300 frames in week seven since there is no scheduled receipt or inventory on hand the net requirements are 200 frames in week three and another 300 in week seven consequently the quantities of planner receipts are 200 in week 3 and 300 in week seven the frames are ordered from suppliers with a lead time of two weeks this means that they have to be ordered in weeks one and five consequently in the MRP the frames planned order release are two orders one with 200 frames to be released at the beginning of week one and another with 300 frames to be released at the beginning of week five one more table for the wood section it is known that to assemble the required lots of shutters 400 with sections are required at the beginning of week three and another 600 with sections are required at the beginning of week 7 as one shutter requires four with sections so the gross requirements of the frames are 400 with sections in week 3 and 600 with sections in week seven there are 70 with sections scheduled receipts at the beginning of week one and will be kept in inventory until week three when they will be used so the net requirements are 400 minus 70 equals 330 with sections in week 3 and 600 with sections in week seven consequently the quantities of planned order receipts are 330 with sections in week 3 and 600 with sections in week seven the wood sections are produced in-house and take one week to be finished this means that they have to be done in weeks two and six consequently in the MRP the with Section plan orders release are two orders one with 300 with sections to be released at the beginning of week two and another was 600 with sections to be released at the beginning of week six now we have this size and timing of planned order releases necessary to meet delivery requirements of 100 shutters in week four and another 150 shutters in week eight this is under the lot for lot ordering condition it is required to repeat this process again under another condition which is lot size ordering with a lot size of 320 units for frames and 70 units for wood sections the MRP for the final product the shutter is the same as the preceding state the difference will be in the emrp for the frames and the wood sections starting with the frames 200 frames are required at the beginning of week three and another 300 are required at the beginning of week 7 to start the Assembly of the required shutters starting with the 200 lot the net requirements are the same 200 as there is no scheduled receipt nor projected inventory as stated in the problem the frame's order size has to be 320 or its multiples so the planned order received at the beginning of week 3 is 320. the lead time for the frames is two weeks so the planned order release of 320 frames must be in week one for the first lot 320 frames will be received at the beginning of week 3 while the required frames are 200 only the extra 120 frames will go to the store so the projected on hand frames in weeks 4 5 6 and 7 are 120. in week seven the gross requirements are 300 and the projected on hand is 120 frames so the net requirements are 300 minus 120 equals 180 frames however the order size must be 320 frames so the planned order receipt is 320 frames the frame's lead time is two weeks so the planned order release of 320 frames must be in week five in week 7 the difference between the planned order receipt and the net requirements is 320 minus 180 equal 140. this extra quantity will go to the store as projected on hand inventory for the next period for the wood section the gross requirements are the same as before 400 units in week 3 and 600 units in week seven moreover 70 units are planned to recede in week one and will be kept in store until week three so in week three the net requirements are 400 minus 70 equal 330. as stated in the problem the with section order size has to be 70 or its multiples the nearest 70 multiple to 330 is 350. so the planned order received in week 3 is 350 with sections the lead time for the with sections is one week so the planned order release of 350 with sections must be in week two for the first lot 350 with sections will be received at the beginning of week 3 while the required with sections are 330 only the extra 20 with sections will go to the store so the projected on hand with sections in weeks 4 5 6 and 7 are 20. in week 7 the gross requirements are 600 with sections and the projected on hand is 20. so the net requirements are 600 minus 20 equals 580 with sections however the with section order size has to be 70 or its multiples the nearest 70 multiple to 580 is 630. so the planned order receipt in week 7 is 630 with sections but with Section lead time is one week so the planned order release of 630 with sections must be in week six in week 7 the difference between the planned order receipt and the net requirements is 630 minus 580 equal 50. this extra quantity will go to the store as projected on hand inventory for the next period now we have the size and timing of planned order releases necessary to meet delivery requirements of 100 shutters in week four and another 150 shutters in week 8. this is under the lot size ordering with a lot size of 320 units for frames and 70 units for with sections where a lot of 320 frames must be ordered in week one and another lot of 320 frames must be ordered in week five moreover an order of 350 with sections must be released in week two and another order of 630 with sections must be released in week six here materials requirements plan has been constructed under different situations thank you for watching if you have any questions do not hesitate to contact me if you like this video so press like and share it and do not forget to subscribe to the channel and activate the alarm to be notified of the new videos see you again