To begin with, as our client firm adopted a strategy of 'manufacturing to stock', it is very important to for our client company to install my firm's computer based planning and control system. With the help of this computer system, our client firm can avoid excessive raw material stocks, excessive finished goods stocks and excessive production facilities down-time, consequently achieving the goal of satisfying customers. This computer system comprises MRP type systems and Fixed Order Quantity type approach.
My report contains 3 sections: 1. the explanation of what MRP is and how it works; 2. the explanation of what is Fixed Order Quantity approach and how it works; 3. my recommendation of how and where in our client company to use both the MRP type systems and the Fixed Order Quantity approachContentsSection 1: the explanation of what MRP is and how it works.
MRP type systems comprise MRP-I (Materials Requirements Planning) system and MRP-II (manufacturing resource planning) system.
Materials Requirements Planning is a technique used to determine the quantity and timing requirements of "dependent demand" materials. It possesses the important characteristic that it is directly dependent on the scheduled production of a large component or finished product. "Dependent demand" means the demand for an inventory item is directly related to, or derived from the demand of another inventory item. The purpose of materials requirements planning technique is to obtain the demand at lower levels as long as it is given a measure of forecast of the total number of customers. It takes as one of its inputs the measured of forecast demand for the system's outputs. It breaks down this demand into its components parts, compares this requirement against existing inventories, and seeks to schedule the parts required against available capacity. The MRP procedure produces a schedule for...