Multi-level production-inventory control: Material requirements planning or reorder point policies?

Abstract This paper compares Material Requirements Planning (MRP) with reorder point policies for multi-level inventory control. For general acyclical inventory systems it is demonstrated that MRP should be ranked at the top followed by installation stock (Q, r)-policies, Kanban-policies and finally order-upto-S policies. For serial and assembly inventory systems also echelon stock (Q, r)-policies are included in the ranking list, between MRP and installation stock (Q, r)-policies. The results require that all policies apply the same review period. Otherwise they are quite general.

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