MATERIAL PLANNING METHODS

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 1. Material Requirements Planning (MRP) – This is a computer-based inventory control system that uses data from production schedules, inventory levels, and sales orders to calculate the quantities of raw materials needed for production. MRP helps to ensure that the right materials are available at the right time.


2. Just In Time (JIT) – This approach involves scheduling the delivery of raw materials just in time for their use in production. It reduces inventory holding costs and eliminates the need for large storage spaces.

3. ABC analysis – This is a method of classifying inventory into categories A, B, and C based on their value. This helps to prioritize inventory control efforts and ensures that material planning focuses on the most important items.

4. Kanban system – This is a visual approach to material planning that uses cards or tokens to signal the need for more materials. This approach is highly effective in ensuring a constant flow of materials to the production line.

5. Vendor-managed inventory (VMI) – In this approach, the supplier manages the inventory for the buyer by monitoring usage levels and automatically restocking when inventory levels reach a certain threshold. This reduces the need for the buyer to hold large inventories.

6. Economic Order Quantity (EOQ) – This is a mathematical approach to determining the optimal order quantity of materials, taking into consideration the cost of holding inventory and the cost of ordering. This approach ensures that the order quantity minimizes inventory holding costs while minimizing ordering costs.

7. Safety stock – This is an inventory buffer that a company maintains to cover unexpected demand fluctuations or supply disruptions. Safety stock ensures that production is not interrupted due to stockouts.

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