A company is operating in two unrelated businesses. The first one is making comm

Question

A company is operating in two unrelated businesses. The first one is making common salt, which is sold in one-kilogram consumer packs. The second business is making readymade garments. The owner of the businesses has decided to implement Materials Requirement Planning (MRP) in one of the two businesses, which is likely to give him greater benefit. Assuming that the current turnover and profits of both the units are comparable, compare the relative benefits and limitations of Materials Requirement Planning (MRP) for these two businesses.

Explanation / Answer

MRP will give more benefits in Readymade garment. readymade garment(RG) needs raw cloths of various type and they need lead time for prepartion so shop floor orders must be issued according to MRP
limitation :thoughs fluctuations in demand can cause uncertanty in MRP
For salt making bussiness MRP is usefull but not much profiting . demands of salt almost remains the same and lead time is very low so MRP doent benifit that much

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