Just-in-time (JIT) & Materials Requirements Planning (MRP).

Full Answer Section

      Materials Requirements Planning (MRP) is a production and inventory management system used to determine the quantity and timing of orders for materials required to manufacture a product. It creates a production schedule and generates purchase orders for materials.   Relationship to Inventory Levels Both JIT and MRP are closely linked to maintaining optimal inventory levels.  

• JIT focuses on reducing inventory to the absolute minimum by coordinating production with demand. This minimizes carrying costs, storage space, and the risk of obsolescence.

 

• MRP helps achieve JIT goals by providing a detailed plan for procuring materials and components. It ensures that the right materials are available at the right time, preventing stockouts and excess inventory.

    Synergy Between JIT and MRP To function effectively, JIT relies on MRP. MRP generates the production schedule and materials requirements, allowing JIT to implement the pull system, where materials are pulled into production as needed.   In essence, MRP is the planning tool that supports the execution of JIT.   By working together, JIT and MRP can significantly improve supply chain efficiency, reduce costs, and enhance responsiveness to customer demand. However, successful implementation requires close collaboration between departments, reliable suppliers, and accurate demand forecasting  

Sample Answer

     

Understanding JIT and MRP

Just-in-Time (JIT) is an inventory management strategy that aims to minimize inventory and production costs by producing only what is needed, when it is needed.

This approach relies on efficient production processes, reliable suppliers, and accurate demand forecasting