Summary
Material requirements planning (MRP) schedules production and inventory when demand is dependent. For MRP to work, management must have a master schedule, precise requirements for all components, accurate inventory and purchasing records, and accurate lead times.
When properly implemented, MRP can contribute in a major way to reduction in inventory while improving customer service levels. MRP techniques allow the operations manager to schedule and replenish stock on a “need-to-order” basis rather than simply a “time-to-order” basis. Many firms using MRP systems find that lot-for-lot can be the low-cost lot-sizing option.
The continuing development of MRP systems has led to its use with lean manufacturing techniques. In addition, MRP can ...
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