October 3, 2022

Ann May O. Salazar COMT4-E

Learning Task 1

1. What is MRP?

Material requirements planning (MRP) is a system for calculating the materials and
components needed to manufacture a product. It consists of three primary steps:
taking inventory of the materials and components on hand, identifying which
additional ones are needed and then scheduling their production or purchase.

2. What are the questions related to inventory that can be answered by MRP?

 How do I manage a warehouse?

 How do I track inventory in multiple locations?
 How do I get the best value for my money with inventory control software?
 What is the best way to manage inventory?
 What results can I expect from using inventory management software?

3. Why do we need (MRP) it?

MRP gives businesses visibility into the inventory requirements needed to meet
demand, helping your business optimize inventory levels and production schedules.
Without this insight, companies have limited visibility and responsiveness, which can
lead to:

 Ordering too much inventory, which increases carrying costs and ties up more
cash in inventory overhead that could be used elsewhere.

 Inability to meet demand because of insufficient raw materials, resulting in lost

sales, canceled contracts and out-of-stocks.

 Disruptions in the production cycle, delaying sub-assembly builds that result in

increased production costs and decreased output.

4. What is Bill of Materials and why is it important?

A BOM is a fact of life in the manufacturing world and plays a critical role in the
development of any product. Simply put, you cannot manufacture a quality product
without one. In essence, a BOM is a comprehensive list detailing all the components
and sub-assembled parts and raw materials needed to build your product.
Whether you are making a toy or a rocket, a BOM helps you to accurately manage
and oversee resources and identify materials to reduce wasteful spending. 

5. How do we design MRP System?

The paper considers the factors affecting the design of material-requirements-

planning (MRP) systems for make-to-order companies. It shows how key elements of
MRP, such as bills of material, design change control, master production scheduling
(MPS) and order entry, can be made to function effectively within this type of
business environment. The work is based on a major research programme between
Simon Container Machinery Ltd and the UMIST, Total Technology Scheme.