MULTILEVEL PRODUCTION-INVENTORY CONTROL - MATERIAL REQUIREMENTS PLANNING OR REORDER POINT POLICIES

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-up-to-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.