Successful implementation of MRP depends on the following factors which makes an MRP effective and efficient. Management commitment Top level management should commit the proper budget and allocate adequate number of resources to successfully implementation of MRP system in the organization. User involvement All the MRP users across the organization will be responsible for the […]Continue Reading... No Comments.
The different MRP Terminologies which are mainly used are Dependent demand: The demand for an item depends on another item. The demand dependency is the degree to which the demand for an item is associated with demand for another item. MRP helps to identify all the dependency and controls the order for each item in […]Continue Reading... No Comments.
Material Requirement Planning (MRP) refers to basic calculations method or tool/software for the materials required to develop the end product along with their time of procurement. It is a technique for determining the quantity of the raw materials required to develop the end product and the timing of the acquisition for the same and making […]Continue Reading... No Comments.
There are three techniques for inventory management: ABC Approach Economic Order Quantity Model Managing Derived-Demand Inventories The ABC (Always Better Control) Approach It is a simple approach in which the main idea is divide the inventory into three (or more) groups based on the quality, quantity or significance of their usage. In some cases, companies […]Continue Reading... No Comments.
There are two basic types of costs associated with current assets. Carrying costs Shortage costs Carrying costs Carrying costs represent all of the direct and opportunity costs of keeping inventory on hand. These include: Storage and tracking costs Insurance and taxes Loss due to obsolescence, deterioration, or theft The opportunity cost of capital on the […]Continue Reading... No Comments.