a very good material for MRP


MATERIAL REQUIREMENT PLANNING
MGT2405, University of Toronto, Denny Hong-Mo Yeh
Material requirement planning is not only a technique for planning “material ”
requirements. It is also a logic that relates all the activities in a company to customer
demands. People can manage all the resources in a company by using MRP logic together
with data processing in other areas. This entire system is called a Manufacturing Resources
Planning System, or MRP II. With the introduction of technological enhancements such as
open systems platforms and client/server architecture, MRP II systems are now evolving
into Enterprise Resource Planning Systems (ERP). An ERP system plans not only the
allocation of manufacturing resources but also other resources, and has applications in
service as well as manufacturing industries. In this book, we concentrate our discussion on
manufacturing.
Nature of Demands
All systems are implemented to satisfy customers’demand. There are different sources of
demand for a product and its component items. Some item requirements are determined
by the needs of other items while others are specified by customers. The former
requirements also come from customers, but indirectly. Item requirements can be
classified as dependent and independent demands.
Independent demand
Demand for an item that is unrelated to the demand for other items. Demand for
finished goods, parts required for destructive testing, and service part requirements
are examples of independent demand.
Dependent demand
Demand that is directly related to or derived from the bill of material structure for
other items or end products. Such demands are calculated and need not be forecasted.[subject_ERP]