What are the benefits derived from a successful Material Requirement Planning (MRP) system?

A Management Information System ICT Revision Questions and Answers

Answer
The benefits of a successful MRP system are:
i) Significantly decreased inventory levels and corresponding decreases in inventory carrying costs.
ii) Fewer stock shortages, which cause production interruption and time-consuming schedule juggling managers.
iii) Increased effectiveness of production supervisors and less production chaos.
iv) Better customer service – an increased ability to meet delivery schedules and to set delivery dates earlier and more reliably.
v) Greater responsiveness to change – MRP gives manufacturing a better feel for the effects of economic swings and changes in product demand can be translated into schedule changes quickly.
vi) Closer coordination of the marketing, engineering and finance activities with the manufacturing activities.



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