How does an MRP inventory system reduces inventory levels?
A)by reducing the uncertainty regarding when materials are needed
B)by receiving materials exactly when needed and in exact quantities
C)by computing the exact costs of purchasing and carrying inventory
D)none of the above

Question

Quizplus · Accepted Answer

An MRP (Material Requirements Planning) system reduces inventory levels by reducing the uncertainty regarding when materials are needed. It enables the manufacturer to plan the exact quantity of materials required for production and the timing of when these materials are required, thus reducing the need for excess inventory. This, in turn, reduces the carrying costs associated with excess inventory. Therefore, option A is the correct choice. Options B and C are not entirely accurate, and option D is incorrect.

How Does an MRP Inventory System Reduces Inventory Levels