Which of the following is considered a primary output report from Material Requirements Planning?

Material Requirements Planning (MRP):

• Material Requirements Planning (MRP) is a system used in manufacturing and supply chain management to plan and control inventory and production processes. Its primary goal is to ensure that materials and components are available for production while minimizing excess inventory and associated costs.

Key Outputs of MRP:

1. Planned Order Schedule (Primary Output)
2. Secondary Reports (Exception Reports, Performance Control Reports, Planning Reports)

Planned Order Schedule (Primary Output):

• The Planned Order Schedule is the most critical output of MRP. It provides a time-phased list of orders that need to be released to meet production demands.

Components of the Planned Order Schedule:

• What to Order: Specifies the materials or components required.
• How Much to Order: Determines the exact quantities needed.
• When to Order: Provides dates for order release and receipt to align with production schedules.

Purpose:

• Guides purchasing decisions (when to buy raw materials).
• Triggers production orders (when to manufacture components).
• Ensures just-in-time (JIT) inventory, reducing holding costs.

Secondary MRP Reports:
While important, these reports support the primary output rather than drive immediate actions.

(1) Exception Reports

• Purpose: Highlights deviations from the plan (e.g., delays, shortages).
• Example: "Supplier X failed to deliver steel on time—expedite order."

(2) Performance Control Reports

• Purpose: Tracks efficiency (e.g., inventory turnover, order accuracy).
• Example: "Last month’s order fulfillment was 95% on time."

(3) Planning Reports

• Purpose: Forecasts future needs (e.g., long-term material requirements).
• Example: "Next quarter’s demand suggests a 20% increase in plastic resin orders."

Why the Planned Order Schedule is the Primary Output

• Actionable: Directly tells managers what to order and when.
• Time-Sensitive: Aligns with production schedules to prevent delays.
• Core Function: Without it, MRP cannot fulfill its main purpose (matching supply with demand).