The material requirements plan not only helps you manage your inventory, it actually defines the inventory you will manage. In this video, Steven explains the input required to determine exactly how to make your products and the important role MRP plays in controlling inventory levels.
- The Material Requirements Plan, or MRP,…not only helps you manage your inventory,…it actually defines the specific inventory needed…to make your finished products.…Once you determine how many products you will make this year…the material requirements plan calculates…and schedules all raw materials, components,…and subassemblies needed to create your final product…and meet your customer orders.…The MRP is a combination of three inputs.…First is the bill of materials, or BOM.…
This is the recipe to make the final product,…telling you what items are required and how many of each.…The BOM also specifies the production sequence,…so you know which items are needed first.…In this example you can not assemble C…until you first make two of the decomponents.…Your final product is normally made up of materials,…components, and subassemblies in this manner.…This is a very simple example.…As you can imagine the bill of materials for an automobile…or a jet airliner is quite complex.…
And the second input is the lead time…
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