Question

MRP provides several benefits. What are 4 benefits of MRP for an automotive parts manufacture? For each explain why this is a benefit

Answer 1

The 4 benefits of MRP are as follows.

1) Production Planning- Material requirement planning allows an organization to properly plan and schedule the production output based on requirements. It allows production managers to manage the availability of raw materials.

2)Inventory Management- MRP helps in managing the inventory and the work in progress thereby reducing excess inventory and the costs associated with inventory. It also helps in maintaining the proper levels of inventory.

3)Purchase planning- MRP helps in purchase planning by ensuring that purchasers have an indication of when the purchase orders have to be released and what quantity has to purchased.This allows purchasers to plan ahead and negotiate better prices with suppliers with reduced lead times.

4)Labour/Manpower planning- MRP allows managers to allocate resources according to the inventory levels and production plan thereby providing for efficient usage of labour.