Material Requirements Planning (MRP)
MRP is an approach used for determining the number of parts, components
and materials needed to produce an end item (product).
Example: Wheel Coach is the largest manufacturer of ambulances in the world.
It produces 12
The Base Stock Model
Example: Consider a situation facing Superior Appliance,
a store that sells refrigerators. Superiors space is limited
and the manufacturer makes frequent deliveries to the
store including other appliances. Therefore, Superior finds
Inventory is one of the most expensive assets of many
companies representing as much as 50% of total invested
Companies must balance inventory investment and customer
Functions of Inventory
1. To separate various parts