ERP, MRP, Make-to-Order, and Make-to-Stock
New Mexico State University
Steven T. Leask, PhD
March, 13, 2013
Enterprise Resource Planning includes a function called Material Requirement Planning. This function schedules the needed components for production. These schedules are related the production planning process, which could be Make-to-Order or Make-to-Stock. Enterprise Resource Planning is a software used in business to organize it, keep communication between departments involved in production such as the purchasing department, production department, sales department, marketing, finance, etc. This software helps on the production. Material Requirement planning (MRP) is an inventory system within the Enterprise Resource Planning (“Material Requirements Planning (MRP), para. 1). Material Requirement Planning supports on purchasing scheduling of raw materials and components needed for production or finished goods (“Material Requirements Planning (MRP) para, 1). For example, in the manufacturing of a vehicle the Material Requirement Planning system would help to purchase the all the components such as tires, seats, harnesses, etc. for its production. Material Requirement Planning begins its process in the plan of production (“Material Requirements Planning (MRP) para. 3). Once production is planned, this systems plans for the purchases of the components needed. Make to order connects orders of production to sales orders (Baran, 2012, para 1). It could be one sale order with different production order, or one to one (Baran, 2012, para 1). The origin of such production orders are initiated at when the sale order is made (Baran, 2012, para 2). Once the sale order is made, production for that order gets started. (Baran, 2012, para 2) Bill of materials plays a big role into this process because if some of the components needed for production are not in-stock, then they have to be purchased so the production starts (Baran, 2012,...
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