Question

Describe how the material requirements planning, manufacturing resource planning, and enterprise resource planning systems relate and some notable differences.

What is the basic idea behind an enterprise resource planning system?

Describe what independent and dependent demand are and what the key differences are between them

Answer 1

Let us first understand the basic meaning of material resource planning, manufacturing resource planning, and enterprise resource planning which are as follows:

Material Resource Planning:  Material resource planning is the system which helps in calculating the material requirements and other components that are needed in the process of manufacturing. It primarily consists of three different components that are:

• taking inventory and components on hands,
• then identifying which additional components or materials are needed,
• and lastly, scheduling the production and purchase.

MRP is one of the most widely used systems for harnessing the computer power to automate the manufacturing process.

Manufacturing Resource Planning:  Manufacturing Resource Planning is an integrated computer information system. It is a evolved version of Material Resource Planning. It is the system which records other additional information such as employee data, and other financial needs.

This system is designed to centralize, integrate, and process information for the process of effective decision making. It helps in scheduling, inventory management and cost control in manufacturing.

Enterprise Resource Planning:  Enterprise Resource Planning is a business process management computer software that allows an organization to use a system of an integrated applications to manage business and automate the other management functions related to technology, service and human resource.

ERP Software integrates all facts information of an operation which includes- product planning, development, manufacturing, sales and marketing, -in a single system and user interface.

All the three systems are related to each other is Manufacturing resource planning, and enterprise resource planning is both the systems are the evolved version of Material Resource Planning.

And, the noble difference between the three is all the systems possess difference is there interface user are different.

Basic idea behind an enterprise resource planning system is:

Gartner coined the term "enterprise resource planning" in 1930. ERP is preceded by Material Requirement Planning which was developed by an engineer IBM engineer, Joseph Orlicky for the calculation of materials and components needed for manufacturing.

Then the material resource planning system evolved and was named as manufacturing resource planning.

Manufacturing Resource Planning was then evolved to make Enterprise Resource Planning. It was made to expand the scope of just manufacturing to cover other business process such as accounting, human resource and supply chain management and to manage all these functions from a single centralized database.

Independent Demand: Independent Demand is defined as, the demand which is unrelated to the demand for other goods. This type of demand is not dependent on the demand for any other product or service. They are independent of he other. Some examples of independent demand are demand for finished goods, parts for distructive testing and service requirement testing, etc..

Dependent Demand:  The term dependent demand is defined as, It is the demand for those items which are demanded to produce independent items. Demand for tools making automobile products, part service, etc. are the examples of dependent demand.

Difference Between Dependent and Independent Demand:

The basic difference between bith the demand is dependent demand is required to fulfill the independent demand

dependent demand products are parts of other products whereas, independent demand is the final products

Dependent demand is a sem-finished product whereas independent is a finished product and is used by the end user.