Materials requirements calculations - mrp system, Microeconomics

Materials Requirements Calculations - MRP System

MRP is a computer-based 'engine' which carries out calculations in order to determine: 

  • What is needed, and
  • When it is needed.

 

There are two steps in the process of calculating materials requirements. The first step is to identify the release and due dates, clarify with the customer the due date and then backward schedule by offsetting each item in order to determine the necessary release date.

The next phase is to connect the inventory information. First, look at the basic information flows. MRP explodes inputs taking into account the inventory status and sequence of construction of the products and determines the necessary quantities and timing of orders needed to satisfy the planned completions (master production schedule). This is shown diagrammatically in the figure above.

A simple master schedule is shown below.

1848_Materials Requirements Calculations – MRP System.png

In the figure above, it can be seen that the front-end activity is master production scheduling. The master production schedule drives the MRP and CRP process. The master production schedule is a statement of what the company will produce - it is not a forecast (see the simple master production schedule table). It forms the production plan for the organisation. Creating this plan is a detailed activity for most companies and is achieved by consultation between the departments of marketing, production and financial management.

This means that a computerised MIS will have taken the customers' order and automatically scheduled the plant, including manufacturing and vendors, and be able to supply and deliver his/her special order within a two week period. Henry Ford may have produced for stock, ie 'any colour you wish as long as it's black'.

However, in 1922 it took only four days to turn sheet metal into a Model 'A' Ford.

Posted Date: 3/14/2013 6:34:49 AM | Location : United States







Related Discussions:- Materials requirements calculations - mrp system, Assignment Help, Ask Question on Materials requirements calculations - mrp system, Get Answer, Expert's Help, Materials requirements calculations - mrp system Discussions

Write discussion on Materials requirements calculations - mrp system
Your posts are moderated
Related Questions
• If Mary uses all her resources to produce hats, she can produce 48 hats an hour. • If she uses all her resources to produce apple pies, she can make 24 apple pies an hour. how

V alue Chain It is the collection of activities within an organization that allows it to compete within an organization. The activities in a value chain can be grouped into

what is money? functions


Economic policy efficiently: The reason for poverty and misery in the developing countries is not essentially the lack of potentialities or resources, human or material, but t


How we constract the cost structure of firms

Which firm has the greatest minimum efficient scale?

Lynne’s income is $2, 000 and she is risk averse. The probability of someone slipping on her stairs is 1 8 . If this happens, she will be sued for $1, 000 and will have to pay that

DETERMINATION OF EXCHANGE RATES: When we study the determinants of exchange rates, we must distinguish between long run determinants and short run because the determinants in