What is the main extension of MRP II over MRP?

It plans all manufacturing resources including capacity, labour, machines and money

It plans only raw material purchases

It removes the master production schedule

It plans only finished goods inventory

Why is MRP II called a 'closed loop' system?

It repeats the same plan every month

It works only inside one department

How do MRP and MRP II differ in handling capacity?

MRP assumes infinite capacity; MRP II checks it with capacity requirements planning

MRP checks capacity; MRP II ignores it

Both use only rough-cut capacity

What does capacity requirements planning (CRP) do?

Checks whether machines and labour can meet the MRP plan

Sets the business plan in money

Orders raw material from suppliers

Practice · 5 marks

MRP II closed loop system

Short answer

MRP II is a company-wide closed-loop system that plans all manufacturing resources—materials, capacity, labour, and money—linking production with marketing and finance. Unlike MRP, it checks capacity and includes financial planning. Main modules: business/sales plan, MPS, MRP, CRP, shop-floor control/purchasing, and finance/simulation.

What is MRP II (Manufacturing Resource Planning)? Explain how it differs from MRP and describe its main modules.

MRP II extends MRP into a company-wide system that plans all the resources of a manufacturing firm: materials, capacity, labour, machines and money. It links production planning with marketing and finance and uses a common database. It is called "closed loop" because feedback from shop floor and suppliers is used to revise plans.

Main modules

 Business plan -> Sales & operations plan
        |
   Master Production Schedule (MPS) -> Rough-cut capacity
        |
   MRP (material plan) -> Capacity requirements planning
        |
   Shop-floor control & purchasing
        |  (feedback to upper levels)

Business and sales/production planning: long-range plan in money and units.
Master production schedule and rough-cut capacity planning.
MRP: time-phased material plan.
Capacity requirements planning (CRP): checks that machines and labour can meet the MRP plan.
Shop-floor control and purchasing: dispatching, order release and supplier control.
Finance, costing and simulation: cost, budgets and "what-if" analysis.

MRP versus MRP II

Basis	MRP	MRP II
Scope	Material planning only	All manufacturing resources
Capacity	Assumed infinite	Checked by CRP
Money	Not included	Financial planning included
Feedback	Limited	Closed loop
Integration	Production only	Marketing, finance, engineering, production

The later extension is ERP, which covers the whole enterprise including HR and accounts.

✓ Answer checked by Claude Opus 5.5 (high effort)

MRP concept, inputs and outputs · Industrial Engineering and Management, chapter 5
Closed loop MBI system · Instrumentation II, chapter 1 · asked 2×
Define control system and closed loop block roles · Control Systems, chapter 1 · asked 5×
Closed loop control system block diagram explained · Control Systems, chapter 1 · asked 4×
Steps to design closed loop control system · Embedded System, chapter 7

All Industrial Engineering and Management chapter 5 questions →

MRP II closed loop system

Main modules

MRP versus MRP II

Related questions