Case Name :      Material Requirements Planning at A-Cat Corp.

Authors :           Jitendra R. Sharma, Tinu Agrawal

Source :             Ivey Publishing

Case ID :            W12868

Discipline :        Operations Management

Case Length :    05 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Material requirements planning (MRP) systems have been widely used by manufacturing firms to maintain an optimum flow of inputs for best production results. By using an MRP system, a firm can prepare a production plan that specifies the number of sub-assemblies that go into the final products along with the exact timeline of an order, from placement to completion. This case analyzes how Sunita Menon’s adoption of an MRP system at A-CAT Corp. (A-CAT) has improved the production-planning process. To make one unit of A-CAT’s main product, P0110, requires two P0X units and two P0Y units; in addition, each P0X unit needs two types of subparts: four P1X1 units and three P1X2 units. The case examines the intricacies of procurement, warehousing and processing costs of various material components by critically evaluating different techniques in practice. Using situational scenarios, the case presents lot-sizing techniques – including lot for lot, economic order quantity, least total cost and least unit cost – for balancing costs such as set-up costs, ordering costs and inventory-holding costs.