Selecting and Evaluating Cost‐effective MRP and MRPII

Abstract

Investment appraisal is shown to be an essential and integral part of the process of selecting the optimum Material Requirements Planning (MRP) or Manufacturing Resources Planning (MRPII) system for a company. The problems of financial evaluation and costing are described and how they can be overcome is shown. Lists are given of the main areas of costs and savings so that managers can identify their company′s own requirements. By concentrating on achieving the major potential benefits, MRPII can be seen to be a very attractive investment and it is suggested that, by using investment appraisal to establish quantified objectives and a timetable for implementation, many of the problems normally associated with the introduction of MRPII can be avoided.