1,062
29
Essay, 2 pages (350 words)

Material requirements planning

Material requirements planning (MRP) is a computer-based inventory management system designed to assist production managers in scheduling and placing orders for dependent demand items. Dependent demand items are components of finished goods” such as raw materials, component parts, and subassemblies” for which the amount of inventory needed depends on the level of production of the final product.

For example, in a plant that manufactured bicycles, dependent demand inventory items might include aluminum, tires, seats, and derailleurs. The first MRP systems of inventory management evolved in the 1940s and 1950s. They used mainframe omputers to explode information from a bill of materials for a certain finished product into a production and purchasing plan for components.

Before long, MRP was expanded to include information feedback loops so that production personnel could change and update the inputs into the system as needed.

The next generation of MRP, known as manufacturing resources planning or MRP II, also incorporated marketing, finance, accounting, engineering, and human resources aspects into the planning process. A related concept that expands on MRP is enterprise resources planning (ERP), which uses computer technology to link the various functional areas cross an entire business enterprise. MRP works backward from a production plan for finished goods to develop requirements for components and raw materials. MRP begins with a schedule for finished goods that is converted into a schedule of requirements for the subassemblies, component parts, and raw materials needed to produce the finished items in the specified time frame,” William J. Stevenson wrote in his bookProduction/Operations Management.

“ Thus, MRP is designed to answer three questions: whatis needed? how much’s needed? andwhenis it needed? ” MRP breaks down inventory requirements into planning periods so that production can be ompleted in a timely manner while inventory levels” and related carrying costs” are kept to a minimum.

Implemented and used properly, it can help production managers plan for capacity needs and allocate production time. But MRP systems can be time consuming and costly to implement, which may put them out of range for some small businesses. In addition, the information that comes out of an MRP system is only as good as the information that goes into it. Companies must maintain current and accurate bills of materials, part numbers, and inventory records if they are to realize the potential benefits of MRP

Thank's for Your Vote!
Material requirements planning. Page 1
Material requirements planning. Page 2
Material requirements planning. Page 3

This work, titled "Material requirements planning" was written and willingly shared by a fellow student. This sample can be utilized as a research and reference resource to aid in the writing of your own work. Any use of the work that does not include an appropriate citation is banned.

If you are the owner of this work and don’t want it to be published on AssignBuster, request its removal.

Request Removal
Cite this Essay

References

AssignBuster. (2022) 'Material requirements planning'. 23 September.

Reference

AssignBuster. (2022, September 23). Material requirements planning. Retrieved from https://assignbuster.com/material-requirements-planning/

References

AssignBuster. 2022. "Material requirements planning." September 23, 2022. https://assignbuster.com/material-requirements-planning/.

1. AssignBuster. "Material requirements planning." September 23, 2022. https://assignbuster.com/material-requirements-planning/.


Bibliography


AssignBuster. "Material requirements planning." September 23, 2022. https://assignbuster.com/material-requirements-planning/.

Work Cited

"Material requirements planning." AssignBuster, 23 Sept. 2022, assignbuster.com/material-requirements-planning/.

Get in Touch

Please, let us know if you have any ideas on improving Material requirements planning, or our service. We will be happy to hear what you think: [email protected]