MGT 250 Lecture Notes - Lecture 63: Master Production Schedule, Production Schedule, Inventory Optimization
11 Jun 2018
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• Materials Requirement Planning (MRP):
➢ Production & inventory system.
➢ From beginning to end precisely determines variables needed to complete
final products.
o Production schedule
o Production batch sizes
o Inventories needed to complete final products.
➢ There are 3 key parts of MRP systems.
1) Master Production Schedule: a detailed schedule that indicates:
o Quantity of each item to be produced.
o Planned delivery dates for those items.
o Time by which each step of production process must be completed to
meet delivery dates.
2) Bill of Materials: identifies:
o All necessary parts & inventory.
o Quantity/volume of inventory to be ordered.
o Order in which parts & inventory should be assembled.
3) Inventory Records: indicate kind, quantity, & location of inventory that’s
on hand or that has been ordered.
o When inventory records are combined w/ bill of materials, resulting
report indicates:
▪ What to buy
▪ When to buy it
▪ What it will cost to order.
➢ Q: Which inventory management system should you use?
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