Materials Requirements Planning

Materials Requirements Planning

I. Objectives of a Materials Requirement Planning (MRP) System

A. Ensure materials are available for production and products are available for delivery to customers

B. Maintain the lowest possible material and product levels in store

C. Plan manufacturing activities, delivery schedules and purchasing activities

II. There are two types of demand

A. Dependent

i. Directly related to the demand for higher-level assemblies or products and can be calculated, such as Raw materials and component inventories

B. Independent

i. Not related to the demand for any other product, example, finished goods such

as a computer

III. There are three types of the MRP System

A. Type I-Inventory Control System

i. Releases manufacturing and purchase...