Capstone Papers-With respect to the supply chain, discuss the terms Just-in-time (JIT) and Materials Requirements Planning (MRP).

Capstone Papers-With respect to the supply chain, discuss the terms Just-in-time (JIT) and Materials Requirements Planning (MRP).

With respect to the supply chain, discuss the terms Just-in-time (JIT) and Materials Requirements Planning (MRP).

How are they related to maintaining proper levels of inventory.

To even begin this process we need to understand what is Just-in-time (JIT) and Materials Requirement Planning (MRP), so we will start with that first.  “The just in time (JIT) inventory system is a management strategy that aligns raw material orders from suppliers directly with production schedules.” (“JIT,” 2018)  JIT is usually tied to predetermined stock levels which are monitored by in company systems and orders are placed based on predetermined reorder points.  The stock and reorder points are determined within our second topic for the week, MPR.

“Materials requirements planning (MRP) is one of the first software-based integrated information systems designed to improve productivity for business.  A materials requirements planning information system is a sales forecast-based system used to schedule raw material deliveries and quantities, given assumptions of machine and labor units required to fulfill a sales forecast.” (“MRP,” 2018)