Examining the effect of material requirement planning on firm performance: evidence from the manufacturing sector in ghana.
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Date
2023
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KNUST
Abstract
Material Requirements Production planning is a technique for planning that helps production managers schedule and place orders for dependent-demand items such as raw materials, component parts, and sub-assemblies in relation to the level of production that they want to achieve. Managers of organisations that manufacture products are well-versed in the role that raw materials play in the day-to-day operations of an organisation. Direct materials play an important role in the production process of the vast majority of manufacturing companies, which in turn affects their performance. Due to inefficient materials management systems, the majority of finished goods are kept in the warehouse rather than being transported to the locations where they will be consumed, which contributes to the inefficiency of the organisation. Therefore, this study is set to analyse the effect of material requirement planning on the performance of manufacturing firms in Ghana. A total of 200 questionnaires were collected and subsequently analysed through a structural equational model. The study revealed that there's a strong, direct, and positive relationship between MRP and FP. In essence, improvements in MRP practises directly contribute to the enhancement of firm performance. a strong, direct, and positive relationship between the use of IT and FP Therefore, effective utilisation of IT in the manufacturing sector in Ghana can directly contribute to improved supply chain performance. Finally, it was revealed that while IT and MRP alone improve firm performance, their cooperation reduces it. This showing that IT moderates the MRP-firm performance link, but not in a positive way. As MRP practises improve, this stimulates better usage of IT, which in turn improves FP. This has the potential to augment the favourable influence of Material Requirements Planning (MRP) on firm Performance (SCP), thereby bolstering the overall efficiency and effectiveness of the supply chain.
Description
A thesis submitted to the Department of Supply Chain and Information Systems, Institute of Distance Learning, in Partial Fulfilment of the Requirements for the Award of the degree of master of science in logistics and suppl y chain management