In: Operations Management
Describe the relationship among the production plan, the master production schedule, and the materials requirements plan. What are the benefits of using these types of plans? How do these plans fit into the strategic business plan? What is a major difference of the plans and how can that difference create potential challenges?
Production plan is the generic schedule of the activities that the business will undertake, to ensure the production rate meets the customer requirements timely. MRP and MPS are subsets of production plan. Material Resource Planning (MRP) and Master Production Schedule (MPS) almost mean the same thing. The major difference is that the MRP plans items that have dependent demand while MPS is focused on the items, which have independent or direct demand. MRP is run daily while MPS is run weekly to keep a check on the raw materials required for production.
Benefits of using above-mentioned plans:
The major differences between MRP and MPS are:
The potential challenge while dealing with MRP and MPS just lies in the fact that they need to be monitored and updated regularly to maintain real-time tracking of the raw materials and demand fulfillment status.