Material Requirement Planning ( MRP-I )

It is a part of production operation system. Management has to develop a lot of strategies for production plan. In early 1960’s a material acquisition plan was first introduced known as Material Requirement Plan ( MRP-I ). MRP-2 is latest all-round development of that plan. 

A brief history of MRP –1

Material requirement planning is a computerized production scheduling system which takes the forward schedule of final product requirements (the master production schedule) and translates it progressively into the numbers of sub-assemblies, components and raw materials required at each stage of the manufacturing cycle.

It is a management information system providing a basis for production decisions when what is manufactured has a composite structure and when lead items are important features. Obviously, the ability of the system to deliver what is required in the correct place at the correct time will be dependent on the quality of information which is put into the computer model.

 Aims of material requirement planning:

1. Determine for final products namely, what should be produced and at what time.
2. Ascertaining the required units of production of sub-assemblies.
3. Determining the requirement for materials based on an up-to-date bill of materials file (BOM).
4. Computing inventories, WIP, batch sizes and manufacturing and packaging lead times.
5. Controlling inventory by ordering bought-in components and raw materials in relation to the orders received or forecast rather than the more usual practice of ordering from stock-level indicators.

Benefits : Detailed forecast of the inventory position is highlighted period by period.
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