Industrial engineering departments typically establish how much of a specific material is required in a specific produc tion process. Either process changes or careless workmanship may lead to deviations in the actual amounts of specific mater ials used in a production process. When the actual quantities of materials used in a production process deviate from the planned qualtities of use, it is likely that variances between actual and standard costs for the particular product will begin to appear. Brigham, E. F. (1989). Financial management: Theory and prac tice. (6th ed.). Hinsdale, Illinois: The Dryden Press. mina tion of an optimum lot size for production runs, or an economic quantity for ordering goods from a supplier (Peters, 1986). In either instance, the purpose of EOQ is to equalize the cost of a production run or of a goods order with the cost of carrying the inventory (Brigham, 1989). JIT production techniques emphasize the elimination of waste, which is defined as "any activity performed within a manufacturing company which does not add value to the pro duct" (Maskell, 1986b, 32). Within the parameters of this definition of waste are inventories, materials handling, quality problems, queues, shop floor delays, lead times, and unnecessary clerical and accounting procedures (Maskell, 1986a). The elimination or minimization of inventories, lead times, and so forth creates a need for radical changes in traditional procedures, which, in turn, demands new approaches for the processes involved. The organizational purchasing function must be fully integrated into the changing procedures and processes, if the hoped for productivity gains are to be realized in the new manufacturing environment. MRP requires the access to and the use of an enormous volume of data. As such MRP is ideally suited for use in con junction with computers. In fact, the use of MRP is somewhat 4impractical, in the absence of computers. The capability of computers to |
