Material requirements planning (MRP) and purchase discounts
- 1 February 1982
- journal article
- Published by Wiley in Journal of Operations Management
- Vol. 2 (2) , 137-143
- https://doi.org/10.1016/0272-6963(82)90029-8
Abstract
This paper reports the results of a simulation experiment that compares alternative procedures for determining purchase quantities in MRP systems when quantity discounts are available. The procedures are least unit cost (LUC), McLaren's order moment (MOM) and a “traditional” procedure that ignores the time‐phased information available from an MRP system. One of the factors in the experiment was requirement uncertainty, a factor heretofore not incorporated in MRP lot‐sizing research. The results of the experiment confirm MOM (and to a lesser extent LUC) as an effective lot‐sizing procedure. In addition, the work shows that the differences between the procedures tend to vanish as the amount of uncertainty in the requirements increases.Keywords
This publication has 1 reference indexed in Scilit:
- Evaluating Alternative Quantity DiscountsJournal of Purchasing and Materials Management, 1977