ITPEC FE Morning October 2021 Question 72
ITPEC FE Morning October 2021 — Question 72 of 80
MRP (Material Requirements Planning) follows three core steps:
1. Gross requirement — using the production plan and BOM (Bill of Materials), calculate total component quantities needed.
2. Net requirement — subtract available inventory to determine actual order quantities.
3. Order timing — schedule orders by working backward from the needed date using manufacturing and procurement lead times.
Why not others:
- (a) CAD — Computer Aided Design is for product design/drafting, not material planning
- (b) CRP — Capacity Requirements Planning deals with production capacity (machines, labor), not materials
- (c) JIT — Just In Time is an inventory philosophy focused on minimizing stock, not a step-by-step BOM-based calculation system
Key rule: MRP answers three questions — what to order, how much to order, and when to order — all derived from the BOM and production schedule.
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