Page 116 - Orlicky's Material Requirements Planning

C HAP TE R 6

The Material Requirements

Planning System

The absence of an order-point approach does not a material requirements planning
(MRP) system make. The term material requirements planning implies certain definite sys-
tem attributes, such as time-phased inventory status data, the computation of net require-
ments, a maximum length of a planning period, a minimum planning horizon span rela-
tive to lead time, and the development of planned orders.
The reader should understand that there are genuine MRP systems and pseudo-
MRP systems in industry usage. There are companies (or rather plants) that do some
form of MRP without having a full-blown or real MRP system. This chapter is concerned
with genuine MRP systems in one or the other of their standard forms.
There are a limited number of alternative MRP system approaches (re viewed in
Chapter 15) but a number of specific techniques and special proce dural features tailored
to meet unusual requirements of a given system user. In the discussion that follows, the
concepts and characteristics of (genuine) MRP systems that are common to such sys tems
will be identified regardless of approach or specific technique used.

OBJECTIVES OF THE SYSTEM
All MRP systems have a common objective, which is to determine (gross and net) require-
ments, that is, discrete period demands for each item of inventory, so as to be able to gener-
ate information needed for correct inventory order action. This action pertains to procure-
ment (purchase orders) and to pro duction (shop orders). It is either new action or a revision
of previous ac tion. New action consists of the placing (release) of an order for a quantity of
an item due on some future date. The essential data elements accompany ing this action are

■ Item identity (part number)
■ Order quantity
■ Date of order release
■ Date of order completion (due date)
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