Materials Requirement Planning for Production Management
This paper examines how Materials Requirement Planning (MRP) can improve production efficiency for a hypothetical manufacturer, Hickory Chest Company. The company's current practice of purchasing raw materials opportunistically—based on low prices rather than production needs—leads to inventory shortages, storage costs, and poor cash flow. Drawing on foundational definitions from Meredith (1987) and Schermerhorn (1989), the paper explains how a computerized MRP system integrates demand forecasts, master production schedules, and inventory data to automate purchasing decisions, reduce waste, and provide operational flexibility. The paper concludes that adopting MRP would allow the company to manufacture more efficiently while managing inventory and purchasing processes effectively.
- Introduction to Materials Requirement Planning: MRP defined; Hickory Chest Company introduced as case
- Current Purchasing Approach and Its Limitations: Opportunistic buying causes stockouts, storage costs, poor cash flow
- How MRP Works and Its Benefits for Hickory Chest Company: MRP automates purchasing using forecasts, schedules, and inventory data
- Conclusion: MRP recommended for improved efficiency and purchasing control
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What makes this paper effective
- The paper grounds its argument in a concrete business scenario (Hickory Chest Company), making abstract MRP concepts tangible and easy to follow.
- It systematically identifies the current system's weaknesses—cost of stockouts, storage expenses, and poor cash flow—before presenting MRP as a targeted solution, giving the argument a clear problem-solution structure.
- It cites two authoritative operations management texts to define and support key claims, demonstrating appropriate academic sourcing even in a short paper.
Key academic technique demonstrated
The paper uses a problem-solution framework: it first diagnoses the operational inefficiencies of the existing purchasing approach, then explains precisely how MRP addresses each identified problem. This technique keeps the argument focused and makes the practical value of the concept immediately clear to the reader.
Structure breakdown
The paper opens with a definition of MRP and introduces the case study context. The second paragraph diagnoses the company's current purchasing problems. The third paragraph explains how MRP functions and enumerates its specific advantages for the company—automation, demand alignment, storage reduction, and flexibility. The final paragraph delivers a brief but clear conclusion reinforcing the overall recommendation. This compact four-paragraph structure suits a short-form analytical essay at the undergraduate level.
Introduction to Materials Requirement Planning
Materials requirement planning (MRP) is defined as an "integrated production planning and control technique that schedules materials needed to create a product" (Schermerhorn 1989, p. 492). It is used to manage resources and inventory needs and to allow materials to be purchased efficiently. To consider how materials requirement planning can assist a business, Hickory Chest Company will be examined. Hickory Chest Company builds and sells thousands of chests each month and operates an active assembly line to produce them. For more than 50 years, it has bought the materials it needed whenever it could get the best deal and kept those materials in its warehouse until they were required. Sometimes the company ran out of raw materials, but management believed that buying cheaply made up for whatever costs were incurred during shortages. This paper discusses how materials requirement planning can assist Hickory Chest Company and make its production more efficient.
Current Purchasing Approach and Its Limitations
The way Hickory Chest Company currently approaches acquiring materials involves allowing the external environment to determine its buying process. That is, the company purchases raw materials when their prices are low. This approach does not take into account the actual needs of Hickory Chest Company and causes raw materials to run out on occasion. This lack of raw materials has a real cost to the company: it limits production and causes other resources to be underutilized. The approach of storing large quantities of raw materials also represents an inefficiency, because there is a cost involved in holding and storing inventory. In addition, Hickory Chest Company is paying upfront for raw materials it cannot use immediately. If the company paid for raw materials as they were needed, it would be able to improve its cash flow. A more effective approach would be to base purchasing on demand and production needs and to have raw materials supplied as they are required. Materials requirement planning can achieve this.
Conclusion
Overall, materials requirement planning would allow Hickory Chest Company to manufacture more efficiently, while inventory and purchasing processes would be managed more effectively. This would reduce many of the problems that currently occur and make those processes easier to manage.
References
Meredith, J. R. (1987). The Management of Operations. New York: John Wiley & Sons.
Schermerhorn, J. R. (1989). Management for Productivity. New York: John Wiley & Sons.
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