Page 386 - Orlicky's Material Requirements Planning

C HAP TE R 21

Historical Context

“Those who cannot remember the past are condemned to repeat it.”
—GEORGE SANTAYANA
“The farther back you can look, the farther forward you are likely to see.”
—SIR WINSTON S. CHURCHILL

PRE-MRP INVENTORY CONTROL
With the invention and articulation of material requirements planning (MRP), the under-
lying assumptions around inventory needed to be challenged. Specifically, the following
mainstays of pre-MRP inventory management became subject to reappraisal as to their
validity, relevance, and applicability to manufacturing inventories:

1. The concept of stock replenishment
2. All techniques built around reorder points
3. The square-root approach to the economic order quantity
4. The analysis and categorization of inventory by function
5. The conventional notion of aggregate inventory management
6. The ABC inventory classification

Stock Replenishment
Stock replenishment is a concept forcibly grafted onto a manufacturing inventory. Typical
replenishment concepts are in conflict with basic management objectives of low invento-
ry and high return on investment. The term replenishment means restoration to a state of

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