Material Requirements Planning
Manufacturing Resource Planning (MRP2 or MRPII)
Around 1980 over-frequent changes in sales forecasts, entailing continual reajustments in production, as well as the unsuitability of the parameters fixed by the system, led MRP (Material Requirements Planning) to evolve into a new concept : Manufacturing Resource Planning or MRP2
Material Requirements Planning (MRP)
is a software based production planning and inventory control system used to manage manufacturing processes. Although it is not common nowadays, it is possible to conduct MRP by hand as well. An MRP system is intended to simultaneously meet three objectives: •
Ensure materials and products are available for production and delivery to customers. •
Maintain the lowest possible level of inventory.
Plan manufacturing activities, delivery schedules and purchasing activities. The scope of MRP in manufacturing
Manufacturing organizations, whatever their products, face the same daily practical problem - that customers want products to be available in a shorter time than it takes to make them. This means that some level of planning is required. Companies need to control the types and quantities of materials they purchase, plan which products are to be produced and in what quantities and ensure that they are able to meet current and future customer demand, all at the lowest possible cost. Making a bad decision in any of these areas will make the company lose money. A few examples are given below: •
If a company purchases insufficient quantities of an item used in manufacturing, or the wrong item, they may be unable to meet contracts to supply products by the agreed date. •
If a company purchases excessive quantities of an item, money is being wasted - the excess quantity ties up cash while it remains as stock and may never even be used at all. However, some purchased items will have a minimum quantity that must be met, therefore,...
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