Abstract
This paper describes the application of the discounted cash flow (DCF) techniques for MRP evaluation, as discussed in the companion paper (1), by means of an ‘in-depth’ case study of a medium sized, small batch engineering company. The results demonstrate that the benefits of material requirements planning (MRP) are company-wide, and that when these benefits are quantified, the financial case for MRP is greatly strengthened. The paper also shows that MRP should not be viewed within the restricted concept of a technique which only improves shop floor efficiency. The use of the evaluation techniques within a number of major companies reveals that the ‘company-wide’ return on investment is much greater than has been previously suggested, and that the greatest potential benefits of MRP accrue outside production.
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