TABLE OF CONTENTS The origins of manufacturing resource planning, also known as MRP II, can be traced back to the early 1960s, to a system known as material requirements planning (MRP or MRP I). MRP is an inventory planning and control system, originally running on mainframe computers. It was designed to replace previous techniques for managing inventories that were based on reorder points (the minimum stock level at which new stock would be ordered) and economic order quantities (the most economic amount of stock to order). The problem with these systems is that they were backward looking, assuming that future demand for an inventory would mirror the past, and could result in an excessive inventory of obsolete stock. In contrast, the theme of MRP is getting the right quantities of supplies and components to the right place at the right time. This is accomplished through the maintenance of accurate databases containing the current inventory and bills of materials (components required for each product), and through the input of the products that need to be made (the master production schedule), the additional materials required can be determined.
During the 1980s and 1990s, the concepts of MRP were extended to cover additional areas of the business. The enlarged version, MRP II, enables systems to examine the engineering and financial implications of future demands on business, as well as the material requirements implications. Hence, the MRP can be described as a total game plan for business (Slack, 2001). Many software suppliers are...
