The Application of Investment Appraisal to Aid the Evaluation and Implementation of Material Requirements Planning Systems
- 1 November 1985
- journal article
- research article
- Published by SAGE Publications in Proceedings of the Institution of Mechanical Engineers, Part B: Management and engineering manufacture
- Vol. 199 (4) , 241-245
- https://doi.org/10.1243/pime_proc_1985_199_075_02
Abstract
This paper describes the application of the discounted cash flow (DCF) techniques for MRP evaluation, as discussed in the companion paper (1), by means of an ‘in-depth’ case study of a medium sized, small batch engineering company. The results demonstrate that the benefits of material requirements planning (MRP) are company-wide, and that when these benefits are quantified, the financial case for MRP is greatly strengthened. The paper also shows that MRP should not be viewed within the restricted concept of a technique which only improves shop floor efficiency. The use of the evaluation techniques within a number of major companies reveals that the ‘company-wide’ return on investment is much greater than has been previously suggested, and that the greatest potential benefits of MRP accrue outside production.Keywords
This publication has 1 reference indexed in Scilit:
- Why computerised production control systems continue to disappointProduction Engineer, 1982