Essay Inventory Control And Production Planning System

1259 Words Dec 4th, 2015 null Page
The objective of the inventory system is to ensure that material is available when needed and Material requirements planning (MRP) is an inventory control and production planning system. Excess inventory required capital and the objective of MRP is keep lowest inventory by determining when component items are needed and scheduling them to be ready at that time, no earlier and no later. MRP recommends the release of work orders and purchase orders, and issues rescheduling notices when necessary (Russell and Taylor, 2014).

For the given problem we have gross requirement that is derived from MPS or planned order releases of the parent. Projected on hand can calculated subtracting demand from inventory on hand and any scheduled receipts and planned order. In period 1 we have 30 in hand and nothing scheduled to be received and we need 25 satisfy demand leaving 30-25=5 (Green arrow) in inventory. In period 2 we have 5 in inventory and received 50 and the demand are 30 that leaves 5+50-30 =25 in the inventory. In period 3, the demand is 56, but we 25 in the inventory, so the net requirement is 56-25 =31 and the projected on hand is 50+25-56 = 19 with a planned order. In period 4 the demand is 25 and we have 19 in inventory leaving 25-19 = 6 net requirement and the projected in hand is 50+19-25 =44 with a planned order. In period 5 the demand is 100 and we have 44 in inventory, so the net requirement is 100-44 = 56 and the projected on hand is 50+44-100 = -6, there cannot be…

Related Documents