Operations Management

Year: MMS – 1st Semester: 1st

Weightage: 100 marks Duration: 40 hrs

Asst Professor Shrinivas Gokhale

NE Society’s Institute of Management Studies

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 Chapter 7 : MRP (Material Requirement Planning)
 American Production & Inventory Control Society (APICS) –
“MRP constitutes a set of techniques that use bill of material, inventory data and the master
production schedule to calculate the requirements for materials.”

 MRP is probably the most comprehensive approach to manufacturing inventory & other
dependents which demand an efficient inventory management system.

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 Objectives of MRP

 Inventory reduction
 Reduction in production & delivery lead times
 Realistic commitments
 Increased efficiency

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 Technical

Elements of
MRP

Basic data
People elements

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 Individual Item
File Data Lead Ties are
Integrity known

Assumptions
to develop Every All components
MRP inventory goes of an assembly
are needed at the
into & out of
time of Assembly
stock

Discrete Process in
disbursement & dependence of
usage of manufacturing
components items
material
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 Factors influencing MRP

1. Production plans
2. Installed capacity of the plant
3. Market demand
4. Nature of the market
5. Political scenarios
6. Organizational resources
7. Transportation materials
8. Reliable delivery schedule
9. Reliability of records & stock keeping

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 Advantages of MRP
1. Improved business results
2. Improved manufacturing
3. Better manufacturing control
4. More accurate & timely information
5. Less inventory
6. Time-phased ordering materials
7. Less material obsolescence
8. Higher reliability
9. More responsiveness to market demand
10. Reduced costs
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 Disadvantages of MRP

1. It requires investments
2. It requires a good technology support
3. It requires lot of data exchange
4. It requires Training for the staff
5. Issue of security
6. Reluctant employees may not work in proper way

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  Thank You! 

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9 11/21/2018
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