Re: Minimum balance for children

Good answer Al.

I'd like to add, there is a principle in materials management that reads
"do not guess what you can calculate", (or something like that). This means
put the safety stock where you have uncertainty of the demand, (on the
finished item in this case), and let MRP calculate the requirements on the
components.

If you also had uncertainty on the components, like if they were also sold
as spare parts, then you might want to cover this uncertainty with
additionnal safety stocks on these components as  well.

Daniel Warthold P. eng CPIM



----- Original Message ----- 
From: "Al Mac" <macwheel99@xxxxxxxxxxx>
To: "SSA's BPCS ERP System" <bpcs-l@xxxxxxxxxxxx>
Sent: Thursday, October 27, 2005 5:13 AM
Subject: Re: [BPCS-L] Minimum balance for children


> Minimum balance on a parent does not cause any components to also have
> minimum balance.  All it causes is for MRP to tell you to make to fill the
> minimum balance, like it is a special kind of order.
>
> Fact that you have a minimum balance on the parent means the MRP tells you
> to make or order enough stuff to fill that minimum balance, plus any other
> requirements.  If you do as MRP says, you will end up with on-hand for the
> parent item equal to the minimum balance, and zero on all the children,
> because you met the requirements.
>
> We have minimum balance on end customer items where they can order from us
> with very short lead time.  So customer orders, we ship them out of the
> safety stock, then manufacture to replenish it.
>
> We have minimum balance on some raw materials that are in heavy demand.
>
> We have considered minimum balance for the output from factory
bottlenecks,
> and where high setup involved.
>
> >   Hi, Can anybody tell whether it is required to maintain Minimum
Balance
> > for children when it is maintained for End Item (Master Scheduled) ?
> > Because, child are already taken care through this topmost parent's min.
> > balance. regards, Prashanth
>
>
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