... re-order quantities were sub optimal. However, the total stock cost curve tends to be relatively flat around the EOQ and consequently relatively insensitive to moderate variations in order quantity. In practice the two systems were often combined to produce a hybrid of regular reviews with order quantities of around the EOQ. One of the benefits of these systems was that they were simple to operate and did not require sophisticated information systems. In the 1960's and 70's Materials Requirement Planning (MRP) emerged, its adoption was accelerated by the corresponding development of computing power. In theory this is a very simple system which states that stocks should be ordered in the same proportions to their usage. So for example, a car manufacturer should hold five times as many wheels as he holds gear sticks. The system does not specify exactly how much to hold, but planning is usually performed on a ...

See this essay or coursework document in full right now