program. Most companies used more than one method
for this.
* Economic order quantity(12 companies).
* Lot for lot technique, the simplest of the variable
ordering techniques (11 companies).
* Since fixed order quantitydoe s not exactlymatch
requirements—generating high inventoryand creating
inventoryremnant s (four companies).
* Fixed period requirements orders a supplyfor a given
number of periods each time (four companies applied
this using regular orders especiallyfor consumable
parts).
* Fixed order period, which sets a fixed time between
orders and orders the amount required to meet the
demand in that period (three companies).
* Part-period algorithm (two companies).
* Least unit cost (three companies).
* Part-period balancing (one company).
Maintenance organizations saw these methods as not
applicable to them; theypursued minimum inventory
and small lot size.
In terms of safetystocks , four companies did not use
them; 19 were applying safety stock to their MRP
system. Thirteen were applying safety stock procedures,
depending on material significance and cost. Onlyone
applied safetystock methods at all levels; six used them
at low-level, and seven restricted safetystock controls
to end item (component) level.4 In theory, safety stock
control can be calculated from experience simplyby
guessing or averaging. However, nine companies surveyed
used statistical methods; eight calculated from
their own experience, and four took an average by
reviewing past usage. No companysim plyguessed.
Three were maintenance organizations ordering parts
based on contracts received and did not use safetystock.
The bill of materials (BOM) processor (software
package) links the BOM file with the inventorystatu s
file so that the requirements explosion accounts for
current inventorylevels of all components. Nineteen
companies applied BOM software packages. The others
did not use the BOM software package, as it was not
seen as applicable to their business. Six companies used
a single-level BOM; nine used multi-level BOM; five
used both methods, and the others not use any.
Twenty-one companies used a regenerative MRP
system. The most common basis for re-planning with a
regenerative system was weekly (13); next common was
daily(4). These data can be compared with earlier
studies. According to Hamid et al. (1991), 75% of
respondents to their surveyupdated their system bya