Dickery Chest Company builds and sells thousands of chests each month and has an active assembly line that produces those chests. For more than 50 years, it has bought the materials it needed when it could get the best deal on those materials and kept the materials in it warehouse until they were needed. Sometimes they run out of raw materials, but they thing that buying cheap makes up for whatever costs they incur when they run out of raw materials.
What can materials requirement planning do for Dickery Chest Company?
Material Requirements Planning is a software based production planning and inventory control system used to manage manufacturing processes.
Material Requirements Planning is intended to meet 3 objectives:
? Ensure materials and products are available for production and delivery to customers.
? Maintain the lowest possible level of inventory.
? Plan manufacturing activities, delivery schedules and purchasing activities.
It is expensive to store materials in your warehouse ...
This posting looks at a mini case of a company that builds chests. and evaluates how Material Requirements Planning could improve operations for this company.