1. What is MRP?

Computerized inventory control

Production planning system
Management information system
Manufacturing control system

2. When to use MRP?

Job shop production
Complex products
Assemble to order environments
Discrete and dependent demand items

3. What can MRP do?

Reduce inventory levels
Reduce component storage
Improve shipping performance
Improve productivity
Simplified and accurate scheduling
Reduce purchasing cost
Improve production schedules
Reduce manufacturing cost
Reduce lead times
Less scarp and rework
Higher production quality
Improve communication
Improve plant efficiency
Reduce freight cost
Reduction in excess inventory
Reduce overtime
Improve supply schedules
Improve calculations of material requirements
Improve competitive position

4. What should be done before implementing MRP process?

Before implementation ABC classification should be done according to
Paretos law.
A 10% 70% Close attention by the senior management
B 20% 20% Bin card system
C 70% 10% Two bin system

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5. What is the broader classification of inventory?

Inventory

Process Number Demand Other

stage and value type

Raw A items Independen Maintenanc

material t e
B items
WIP
Dependent Dependent
Finished C items
goods Operating

6. What are the inputs to a production plan?

Marketing
customer
Production demand
capacity Finance cash
inventory flow

Aggregate Human
Procurement production resources
supplier plan manpower
performance planning

Management Engineering
return on design
investment completion
capital

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7. What is the production planning process?

Production Master
plan production
schedule

Material
requirement
plan

Capacity
requirement
plan

Realistic
NO

YES
Execute
capacity plans

Execute
material plans

8. What is bill of material?

Bill of material is a list of components and quantities needed to make a
product.
9. What are the requirements of implementing a computerized MRP system?
Computer system
Mainly discrete products
Accurate bill of materials
Accurate inventory status
Stable lead times

10. What are the three basic steps of MRP?

Identifying the requirements
Running MRP Creating the suggestions
Firming the suggestions

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11. How to identify the requirements?
Quantity on hand
Quantity on open purchase order
Quantity in/or planned for manufacturing
Quantity committed for existing order
Quantity forecasted

12. How to create suggestions?

Critical items
Expedite items
Delay items

13. How to firm the suggestions?

Manufacturing orders
Purchasing orders
Various reports

14. Give the overview of the MRP system.

MRP is a computerized inventory control and a production planning
system that schedules component items as needed which will track
inventory and help you I many other aspects in business.
15. What are the outputs to the MRP system?
Manufacturing orders
Purchasing orders
Various reports

16. What is the product structure file?

The way of representing bill of materials. Tree based structure Is used to
represent the product structure file. For example; if the final product is A
and initial materials are D, E and F, then the amount of materials needed
to make the next level product in the tree is shown as numbers in brackets.

A
B C
(4) (2)
D E D F
(2) (1) (3) (2)
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17. What is the master production schedule?
Schedule of finished products representing products but not demand. Also
forecasts the combination of customer orders and demand. And also it
determines what needs to be produced.
18. What should be in inventory master file?
On hand quantities
On order quantities
Lot sizes
Safety stock
Lead time
Past usage figures

19. What is ERP?

An ERP system is an attempt to integrate all functions across a company
to a single computer system that can serve all those functions specific
needs.
20. What are the primary and supporting process, should be integrated by an
ERP system?
Customers and suppliers

21. What are the major reasons for adopting ERP?

Integrate financial information
Integrate customer order information
Standardize and speed up operations processes
Reduce inventory
Standardize Human Resources information

22. What are the potential benefits of ERP?

Internal Benefits

Integration of a single source of data

Common data definition
A real-time system
Increased productivity
Reduced operating costs
Improved internal communication
Foundation for future improvement

External Benefits

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 Improved customer service and order fulfillment
Improved communication with suppliers and customers
Enhanced competitive position
Increased sales and profits

23. What are the ERP implementing approaches?

The big bang install a single ERP system across the entire
organization
Franchising Independent ERP systems are installed in different units
linked by common processes, e.g., book keeping.
Slam dunk install one or several ERP modules for phased
implementation of key business processes.

24. What are the major phases of ERP implementation?

Initiation develop business case, project scope, and implementation
strategy
Planning establish implementation team, determine goals and
objectives, establish metrics
Analysis and process design analyze and improve existing processes,
map new processes to be adopted by the system
Realization install a base system, customization, and test the system
Transition replace the formal system with the new system, data
conversion
Operation monitor and improve system performance, provide
continued training and technical support

25. What are the major challenges to ERP implementation?

Limitations of ERP technical capabilities
Inconsistency with existing business processes
Costs - implementation (hardware, software, training, consulting) and
maintenance
Impact on organizational structure (front office vs. back office, product
lines, etc.)
Changes in employee responsibilities
Flexibility of software system upgrades
Implementation timelines
Availability of internal technical knowledge and resources
Education and training
Implementation strategy and execution
Resistance to change

26. What are the new developments of ERP?

Availability of web-based and wireless ERP systems

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 Adoption of easy-to-install ERP systems
Linkage to other software systems, e.g., supply chain management
system, e-commerce, customer relationship management system

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