Simulation analysis of a multi-item MRP system based on factorial design

MRP (Material Requirements Planning) has been widely used as a production scheduling system in many companies for at least the past twenty-five years. However, it is a deterministic planning tool, and therefore its ability as an effective planning tool when there is a high degree of uncertainty is questionable. In this study, we develop a multi-item MRP simulation model and design experiments to determine the effects of factors such as forecast errors, process variability and updating on key performance measures. The analysis of variance (ANOVA) results show that these factors affect the inventory and fill rate significantly.