Operations
Manager
MRP1 Overview
MRP inventory plan (MRP1)
 MRP1
computes weekly net requirements for an inventory item for up to
20 weeks in the future. The model then schedules planned order
releases and receipts to satisfy those requirements. Leadtimes
can range from 0 to 6 weeks. MRP1 can handle a variety of practical
complications in inventory planning, such as units previously allocated
to specific future production runs, previously scheduled order receipts,
lot sizing, safety stocks, and yields which are less than 100% of
production quantities.
MRP1 makes it easy to do a great deal of what-if
analysis. A common problem in lot-sizing is that it frequently
leads to carrying excess stock during periods of low demand. You
can attempt to minimize excess stock by trying different lot sizes. If
leadtimes are uncertain, you can add "safety leadtime"
by trying larger leadtime values. If yields are uncertain,
you can decrease the yield percentage. Another option is the
POQ model in the next section.
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