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The Profitable Supply Chain: A Practitioner's Guide by Ramnath Ganesan

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CHAPTER 4

Supply Planning

Supply planning is the process of specifying production and inventory levels in order to meet projected demand. It is a fundamental step for all goods-producing companies, and has been performed in one form or other since the advent of mass production. The reorder point (ROP) approach, still in vogue today, has been practiced since the industrial revolution. The Toyota Production System (TPS), introduced in the 1950s, was a revolutionary approach that helped rethink the flow of materials in a factory. The next development of note was material requirements planning (MRP), developed in 1964 by Joseph Orlicky. MRP is a rigorous demand-driven approach to coordinating material requirements across finished goods, sub-assemblies, ...

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