INFORMATION SYSTEMS IN MANAGEMENT IV

Figure 5. Closed-loop MRP.Source: [15 p.9]The next step in this evolution is called Manufacturing Resource Planning or MRPII (to distinguish it from Material Requirements Planning, MRP). A direct outgrowthand extension of closed-loop MRP, it involves three additional elements:• Sales & Operations Planning – a powerful process to balance demand and supplyat the volume level, thereby providing top management with far greatercontrol over operational aspects of the business,• financial interface – the ability to translate the operating plan (in pieces,pounds, gallons, or other units) into financial terms (dollars).• Simulation – the ability to ask “what-if” questions and to obtain actionableanswers – in both units and dollars.Definition of Manufacturing Resource Planning come from APICS – The EducationalSociety for Resource Management:“MANUFACTURING RESOURCE PLANNING (MRP II) – A method for the effectiveplanning of all resources of a manufacturing company. Ideally, it addressesoperational planning in units, financial planning in dollars, and has a simulationcapability to answer “what-if” questions. It is made up of a variety of functions,each linked together: business planning, sales and operations planning, productionplanning, master scheduling, material requirements planning, capacity require-41