E9.1 Item Branch Planning Code (MPST) - What is the difference between 1, 2, & 3?

richchipper

Well Known Member
We are a manufacturing company that uses multi-branch DRP for planning purposes. I've never been sure what the difference between planning codes 1, 2 & 3 (Planned by MPS or DRP / Planned by MRP / Planned MRP with Forecast). It doesn't seem like it's making a change to the calculations, but a user just asked me the question and I can't seem to find the answer in the usual places. Thanks in advance.
 

jhsiao520123

Active Member
The MPS and DRP items should go with planning code = 1, and MRP items go with 2. Forget about 3 which I know is the definition brought from World and I don't see the necessity in E1.
When you run R3483 with generation types 1 for MPS/DRP, and then R3483 again for generation type 5. You will have different MRP results if the DS = planning code 1 and 2, or the planning code = 2 only.
 

Larry_Jones

Legendary Poster
We use 0, 2, 3, 4 and a custom code 6.
I'm not a planner but I know they use 3 in combination with a Order Policy code of 4 (Period of Supply vs Lot for Lot).
 

Marsh06usn

Member

0 = Reorder point​

If an item has an order policy code of zero then the MRP/MPS/DRP system will not plan this item. Component demand will only show up in the MRP system when active work orders (WOs) exist for the parent item that have parts lists attached.
Refer to E1: 43: Overview of The Purchase Order Generator (P43011) Document 625474.1.

1 = Lot-for-lot or as required​

If an item has an Order Policy Code of one (1), then the system will create messages for either WOs or POs (purchase orders), for the exact amount needed - no more, no less. However, if this Order Policy Code is used in conjunction with the Item Branch Quantities (P41026), users may specify quantities like minimum and maximum reorder quantities, multiple order quantities, etc. (See the Item Branch Quantities section below for more information/clarification).

2 = Fixed order quantity (FOQ)​

If an item has an Order Policy Code of two (2), the system will create messages for either WOs or POs based on the value entered in the Value Order Policy (OPV) in the P41026 Plant Manufacturing Data. This value (OPV) is in the primary unit of measure, and becomes the Fixed Order Quantity (FOQ). If demand exceeds the FOQ, then the system will create another Order Message for the FOQ.

Use FOQ for planning items like resistors that are purchased by the reel (2500 per reel), printed circuit boards (ex. 8/pallet), or items that have a quantity restriction on a machine, or other production limitation.

example: Demand for period 1 is 25
FOQ = 10
Three (3) different Order messages for a quantity of 10 each will be created.

3 = Economic Order Quantity (EOQ)​

If an item has an Order Policy Code of three (3), then the system will create messages for POs (EOQ is valid for purchased items only) based on the following formula:

EOQ = Division of [2(POCS)/(INCS)] * [(SQ01+SQ02+ ...SQ12)/(CSTA)]

POCS = Cost to issue a purchase order from the value entered in the Branch Plant Constants. (P41024)

SQ01 through SQ12 = Monthly sales, in units, calculated form data contained in the Item History File (F4115). These fields are added together in to get the annual sales.

CSTA
= Average Cost of the item, from the Cost Ledger File (F4105) field UNCS.

INCS = Cost of carrying inventory form the value entered in the Branch Plant Constants (P41001).

The behavior of EOQ is as follows:

1. If EOQ > demand, then an order message for EOQ will be created.
i.e. EOQ = 87
Demand = 50

An order message for 87 will be created.

2. If EOQ < demand, then an order message for demand will be created.
i.e. EOQ = 87
Demand = 100

An order message for 100 will be created.

4 = Periods of Supply​

Using an Order Policy Code of four (4) will create generate messages for work orders or purchase orders based on the value entered in the Value Order Policy field. The number of days in the Value Order Policy is based on the Shop Floor Calendar (P00071) for manufactured items and calendar days for purchased items, and is the number of additional days after a unsatisfied demand is encountered that MRP Order messages will be created for. Other industry terms: Message consolidation, or consolidated messages.

example: Weekly demand from forecast, sales and workorders is not consistent. Item is inexpensive to purchase, like small hardware, and carrying costs low. May have safety stock to cover scrap or loss.
Value Order Policy = 180 days (around 6 months)
MRP will plan one order message (+PLO on Time Series) for 6 months of supply. This order policy code was designed to be used with high-use/low cost items for which the user is not concerned about carrying excess inventory.

5 = Rate scheduled item​

If an item has a Order Policy Code of five (5) then the system will generate messages based on existing rates and rate generation rules. This order policy code is for parent rate-scheduled items only - components of rate items should not use this policy code. Order policy code five is also used in conjunction with the Value Order Policy field. The value entered in the Value Order Policy code with rate scheduled items behaves much like a safety stock - if the ending available is below or above this number then the MRP system will create "increase rate to" or "decrease rate to" messages for the rate scheduled item.

For more information see E1: 31: Rates: Set-Up and Overview of Repetitive Manufacturing Document 625969.1.
 

jhsiao520123

Active Member

0 = Reorder point​

If an item has an order policy code of zero then the MRP/MPS/DRP system will not plan this item. Component demand will only show up in the MRP system when active work orders (WOs) exist for the parent item that have parts lists attached.
Refer to E1: 43: Overview of The Purchase Order Generator (P43011) Document 625474.1.

1 = Lot-for-lot or as required​

If an item has an Order Policy Code of one (1), then the system will create messages for either WOs or POs (purchase orders), for the exact amount needed - no more, no less. However, if this Order Policy Code is used in conjunction with the Item Branch Quantities (P41026), users may specify quantities like minimum and maximum reorder quantities, multiple order quantities, etc. (See the Item Branch Quantities section below for more information/clarification).

2 = Fixed order quantity (FOQ)​

If an item has an Order Policy Code of two (2), the system will create messages for either WOs or POs based on the value entered in the Value Order Policy (OPV) in the P41026 Plant Manufacturing Data. This value (OPV) is in the primary unit of measure, and becomes the Fixed Order Quantity (FOQ). If demand exceeds the FOQ, then the system will create another Order Message for the FOQ.

Use FOQ for planning items like resistors that are purchased by the reel (2500 per reel), printed circuit boards (ex. 8/pallet), or items that have a quantity restriction on a machine, or other production limitation.



3 = Economic Order Quantity (EOQ)​

If an item has an Order Policy Code of three (3), then the system will create messages for POs (EOQ is valid for purchased items only) based on the following formula:

EOQ = Division of [2(POCS)/(INCS)] * [(SQ01+SQ02+ ...SQ12)/(CSTA)]

POCS = Cost to issue a purchase order from the value entered in the Branch Plant Constants. (P41024)

SQ01 through SQ12 = Monthly sales, in units, calculated form data contained in the Item History File (F4115). These fields are added together in to get the annual sales.

CSTA = Average Cost of the item, from the Cost Ledger File (F4105) field UNCS.

INCS = Cost of carrying inventory form the value entered in the Branch Plant Constants (P41001).

The behavior of EOQ is as follows:

1. If EOQ > demand, then an order message for EOQ will be created.
i.e. EOQ = 87
Demand = 50

An order message for 87 will be created.

2. If EOQ < demand, then an order message for demand will be created.
i.e. EOQ = 87
Demand = 100

An order message for 100 will be created.

4 = Periods of Supply​

Using an Order Policy Code of four (4) will create generate messages for work orders or purchase orders based on the value entered in the Value Order Policy field. The number of days in the Value Order Policy is based on the Shop Floor Calendar (P00071) for manufactured items and calendar days for purchased items, and is the number of additional days after a unsatisfied demand is encountered that MRP Order messages will be created for. Other industry terms: Message consolidation, or consolidated messages.



5 = Rate scheduled item​

If an item has a Order Policy Code of five (5) then the system will generate messages based on existing rates and rate generation rules. This order policy code is for parent rate-scheduled items only - components of rate items should not use this policy code. Order policy code five is also used in conjunction with the Value Order Policy field. The value entered in the Value Order Policy code with rate scheduled items behaves much like a safety stock - if the ending available is below or above this number then the MRP system will create "increase rate to" or "decrease rate to" messages for the rate scheduled item.

For more information see E1: 31: Rates: Set-Up and Overview of Repetitive Manufacturing Document 625969.1.
The origianl question is about the planning codes, and here with your explanation is on Order Policy Codes?
 
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