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Team name: Chom Chom Team member: Nguyen Thi Bao Chau Han Phuong Thanh Ho Xuan Minh

Tran Nhu Quoc

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Manufacturing organizations, whatever their products, face the same daily practical problem - that customers want products to be available in a shorter time than it takes to make them. This means that some level of planning is required."

Definition: Material requirements

planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. MRP provides answers for several questions: What items are required? How many are required? When are they required? Then MRP disaggregates the timing

Customers Orders

Demand Forecasts

Master Production Schedule Bill of Materials Files Inventory Status Files

MRP Program Outputs and Reports

Maintain reasonable
safety stock levels, minimize inventories Identify problems and disruptions Based on actual orders and demand forecasts Coordinate materials ordering across points Suitable for various production systems

Difficult in making changes Not usually sensitive to short-term fluctuations in demand Increasing in ordering and transportation costs

Increases customer service and satisfaction Improves utilization of facilities and labour; Enhances better inventory planning and scheduling; Enables faster response to market changes and shifts, Reduces inventory levels without reducing customer
(Hsieh& Kleiner, 1992)

Collins Industries, Inc. was founded in 1971 In the U.S., Collins is the largest manufacturer of ambulances. The second largest manufacturer of terminal trucks. Leading manufacturer of small school buses, and sweepers used in the road construction industry

MRP can help company in performing their needed task properly which are:

Material plant meet both the master production schedule

and capabilities of the production facility.

The plan must be executed as designed. Effective material, consignment inventory and a constant
review of purchase method reduce inventory investment.

Maintain excellent record integrity.

Forecast the trend of the markets.

"we are preparing to meet these future demands as evidenced by our recent commitment to invest $4.0 million in new capital equipment that will be dedicated to automating certain ambulance operations
(Lynn Collins, 2002)

Specific what is to be made. Determine precise feasibility of the master production

schedule. Minimal the inventory investment.

Better response to customer order. Faster response to market changes. Improve utilization of facilities and labor
higher productivity and return on investment.

Reduce inventory levels holding.

Specialization: Export and import,

exchange, and manufacture clothings

Inventory strategy (1995): just in time


Inventory strategy (2000): material

requirement planning.

Considering the recent customer orders and the

demand forecast

Making the list of materials needed to manufacture

products according to the order.

Setting the lead time for the product from ordering

the materials to finished goods (depend on styles of clothing).

Detailing production process

Efficiency Managing well materials needed

Difficulty of setting the lead time. The time for production depends heavily on the time ordering the materials

Capability of changing the Difficulty of achieving the lead time


Hsieh, PJ & Kleiner, BH 1992, New Developments in Inventory and Materials Management, Logistics Information Management, vol. 5, issue 2, pp. 32 35, Emerald database, < contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0880050205.pdf> Coyle, J.J, Langley Jr, C.J, Gibson, B.J, Novack, R.A & Bardi, E.J 2009, Supply Chain Management: A Logistics Perspective, 8th edn, South-Western Cengage Learning, USA, pp. 368 373., viewed 22 July 2010, < search=Hubbell+Lighting+Case+Study+about+MRP> W. Sayre, L 2002, Collins Reports Fourth Quarter and Fiscal Year Results & Improved Sales Backlog , THE FREE LIBRARY BY FARLEX, viewed 22 July 2010, < %26+Improved...-a0132304451> Collins Industries. Inc, 2009, homepage, Collins Industries, USA, viewed 22 July 2010, <>. Ho Xuan Mao Reports, 2010, interview and observation, 17 July 2010.
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