By fulfilling a Material Requirements Planning (MRP) system, Riordan Manufacturing lead be able to roaringly abbreviate the inventory be of finished goods as well as the be of rude(a) materials. The MRP system will aid Riordan in accomplishing these goals beca persona MRP, in its elementary form is a computer program determining how much(prenominal) of each item is needed and when it is needed to complete a specified number of units in a specific clock period (Chase, Jacobs & Aquilano, 2006). Because Riordan has an aggressive goal of reaching $50 million dollars in revenue, it is extremely important that the organization implement a MRP system to keep costs of raw materials and inventories graduate while working so diligently to increase sales. The successful implementation of the MRP system will forget Riordan to experience change magnitude profits with the increased sales due to the reduced costs in materials and inventories.
The recommended MRP system will serving Riordan to streamline their production service by eliminating surplus steps and limiting the pith of production to only what is needed. Currently, Riordan produces electric fans in a make-to-stock model, which is ground on forecasts from previous years sales numbers.
If the forecast turns step to the fore to not be very accurate, Riordan will face an unnecessary shortage or overage of electric fans. We recommend that Riordan use the new MRP system to implement a make-to- battle array process, which will allow production to happen only when an order has been placed. The new make-to-order process will eliminate any overages or shortages cause by the potential inaccuracies of forecasts because product will only be produced when an order has been placed for that product.
The new MRP system will also help to streamline Riordans write out chain because it will reduce the amount of material that needs to be provided by the supply chain. Currently, Riordan maintains a safety stock of a...If you want to get a full essay, order it on our website: Ordercustompaper.com
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