Production Planning Considerations

When products need to be manufactured, a number of complicating factors arise that make a simple target inventory position policy for managing inventory impractical. The most common approach to inventory and supply planning in manufacturing environments is to use material requirements planning (MRP) logic to determine the timing of production and lot size quantities. The basic logic of MRP is well documented8 and is embedded within the software of most Enterprise Resource Planning (ERP) systems. The general concept, originally developed by J. Orlicky, G. Plossl, O. Wight,9 and others in the 1960s and 1970s, is to define the manufacturing process of a finished product as a set of operations with precedents, ...

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