Which of the following statements is not true about mrp?
Options:
A. MRP uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements
B. MRP is an independent demand technique used in a production environment.
C. MRP has evolved as the basis for Enterprise Resource Planning
D. MRP provides a clean structure for dependent demand.
The Correct Answer Is:
B. MRP is an independent demand technique used in a production environment.
Let’s dive into the details about Material Requirements Planning (MRP) and why each of the statements is either correct or incorrect.
Explanation of Correct Answer : B. MRP is an independent demand technique used in a production environment.
MRP is actually a dependent demand technique used in a production environment. It’s crucial to understand the difference between independent and dependent demand. Independent demand refers to demand for finished products that are influenced by market demand, consumer needs, or forecasts.
Examples include consumer goods like smartphones or cars. On the other hand, dependent demand refers to the demand for components or materials needed to produce finished goods. MRP deals specifically with managing dependent demand by calculating the materials needed for production based on the requirements of the final product.
Explanation of why other answers are incorrect:
A. MRP uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements:
This statement is accurate. MRP relies on a few critical components:
- Bill of Materials (BOM): This comprehensive list details all the raw materials, components, and quantities needed to assemble a final product. It’s a fundamental component of MRP as it forms the basis for calculating material requirements.
- Inventory Levels: MRP considers existing inventory levels to determine the quantity of materials needed for production. It helps in avoiding overstocking or shortages by aligning production needs with current stock levels.
- Expected Receipts: Anticipated deliveries or arrivals of materials are essential in MRP calculations. It ensures that the system accounts for incoming materials when planning production schedules.
- Master Production Schedule (MPS): This schedule outlines the production plan detailing what needs to be produced and when. MRP uses this schedule to align material requirements with production timelines.
Combining these elements, MRP’s primary goal is to streamline production by ensuring the availability of materials at the right time and in the right quantities.
C. MRP has evolved as the basis for Enterprise Resource Planning (ERP):
This statement is accurate. MRP laid the foundation for more comprehensive systems like ERP. While MRP focuses primarily on material planning and scheduling within manufacturing, ERP integrates various business functions like finance, human resources, supply chain, customer relationship management, and more.
It expanded on the concepts of MRP, incorporating broader organizational functions into a single integrated system.
D. MRP provides a clean structure for dependent demand:
This statement is also accurate. Dependent demand arises from the need for components or materials to fulfill the requirements of the final product. MRP provides a systematic and structured approach to manage this dependent demand.
By analyzing the BOM, considering inventory levels, expected receipts, and aligning them with the master production schedule, MRP ensures a streamlined process for fulfilling material needs in manufacturing.
In conclusion, the incorrect statement among the options provided is B. MRP is an independent demand technique used in a production environment. MRP, in fact, deals with dependent demand by calculating the materials required for production based on the demand for the final product.
It’s an essential tool in production planning and control, ensuring efficient utilization of resources and timely production.
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I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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