Summary

This applies to the MRP calculation process:

Unit of Measure Conversions

All calculations are using the item's stocking unit of measure. Forecast, sales orders and purchase orders are converted to the stocking unit of measure when calculating requirements. Planned purchase orders are converted to the purchase order unit of measure when actual orders are created.

Calculations

Calculations use sales orders, factory orders, purchase orders, bill of materials, and forecasts. Only orders with an outstanding order quantity are included. Existing orders are not updated or changed in any way by running the process. However, Greentree:

Generates suggested planned purchase or factory orders.
Presents warning messages to reschedule or cancel existing purchase or factory orders.

The calculation process returns these details for each selected item:

Due date
Gross Requirement
Scheduled Receipts
Calculated On-hand
Net Requirement
Planned Order

Sequence of events

When you recalculate an existing MRP, all previously calculated planned orders and action messages, with the exception of firm planned orders, are deleted. This sequence of events applies to the calculation process:

Process kitset items first.
Prorate the forecast if required.
Calculate, in ascending order, low level codes, starting at zero.
Calculate all items with the same low level code, then move to the next low level code.
Calculate:
- Gross requirements
- Net requirements and planned orders if required for today's date
- Net requirements and planned orders if required for all subsequent dates

Gross requirements

Gross requirement calculations vary depending on the demand generation option selected on the MRP Module Control form. For all options, the calculation process begins with inventory items with a low level code of zero, and calculates net requirements for each level in increasing order of low level codes.

If a bill of material exists for the item being processed, the process uses its calculated planned order quantities to calculate the gross requirements for all items in the bill of material:

Planned order quantity x (BOM component quantity ÷ batch size).
Accumulate the gross requirements for each component and use the accumulated total as the gross requirement when the components low level code is processed.

If a scheduled receipt also exists for an item with a bill of material, the process checks if there are any gross requirements for the components in the factory order and accumulates this gross requirement when the components low level code is processed.

The gross requirement for a component is defined as the line's bill quantity required less quantity issued less quantity adjusted from the factory order. If the order status is Entered and Not Committed, the gross requirement is:

factory order quantity required x BOM line quantity required ÷ BOM batch size

The due date of a forecast is the start date of the period the forecast is in, or in the case if the demand time fence is in the same period as the forecast, the day after the demand time fence.

Date Gross requirements

Gross requirements are calculated by inventory item, by date. The date is either the sales order line item delivery date or the forecast start (required by) date.

Net Requirements

Once the gross requirement is established, the net requirement and planned orders are calculated for the next low level code range of items. For example, the net requirement for an item with a low level code of zero becomes the gross requirement for an inventory item in its bill of material with a low level code of 1.