Inter-linking Mrp Theory and Production and Inventory Control Models

We review the field of Materials Requirements Planning (MRP) and Production and Inventory Control (PIC) theory and highlight their similarities, differences and some conditions for oneto-one correspondence. The most important similarity is the use of transform techniques to model time delays in the systems. However MRP theory treats complete product structures, whereas PIC has usually been only considered with single item problems. Moreover, MRP theory is able to further breakdown lead-times to deal with explicit detail concerned with the precise assembly of internal lead-times. This is often missing in conventional PIC theory. However, MRP theory requires information about future demands, whereas there is not always such a requirement with PIC theory. Thus an MRP system typically suffers from system nervousness, an important problem that has yet to be solved. Whereas the analogous problem in PIC theory, bullwhip, is relatively well-understood. We explore these issues with a simple model interlinking MRP and PIC theory.