Which of the following is a key benefit of implementing an MRP system?

Implementing a Material Requirements Planning (MRP) system provides significant benefits to supply chain management, particularly in the areas of on-time delivery and inventory management. The primary function of an MRP system is to ensure that the right materials are available for production at the right time, which directly improves production scheduling and workflow.

By accurately forecasting material requirements based on demand, an MRP system reduces the likelihood of stockouts—a scenario where materials are unavailable for production—thereby supporting timely delivery of products to customers. Additionally, MRP systems help optimize inventory levels by determining the precise amounts of materials needed, which can lead to reduced excess inventory and associated carrying costs. This not only minimizes waste but also enhances the cash flow of a business.

Overall, the integration of an MRP system streamlines operations, ensuring that production is both efficient and responsive to customer demands, making improved on-time delivery and reduced inventory costs a central advantage of utilizing such a system.