OPTIMIZING COAL MINE INVENTORY COSTS WITH MATERIAL REQUIREMENTS PLANNING.

Material requirements planning (MRP) is an efficient material control system that integrates the production planning and inventory management functions. Net material requirements are determined from the production forecast utilizing bill of material files, the inventory status file, and the purchase order status file. Net requirements are computed for each period in a specified planning horizon and purchase orders, offset by lead time, are initiated routinely to ensure timely receipt of materials. The MRP system is especially useful in inventory systems in which consumption of materials is production dependent.