Explain Why, in a Dependent Demand Environment, MRP Does a Better

question 4

Essay

Explain why, in a dependent demand environment, MRP does a better job of estimating the need to replenish inventory items than does the reorder point system.

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Definitions:

Aggregate Supply

The total supply of goods and services available to an economy from producers at a given overall price level and at a given time period.

Hyperinflation

An extremely high and typically accelerating inflation rate, causing a rapid erosion of currency's value.

Deflation

A decrease in the general price level of goods and services, often characterized by the increase in the value of money.

Disinflation

Disinflation is the process of slowing down the rate of inflation, indicating a reduction in the speed at which the general level of prices for goods and services is rising.