A. This is not a true statement. A company using MRP software still needs to determine what parts are necessary for assembly of its products. However, MRP automates the process of determining what sub-assemply parts need to be ordered and when to place the order, so that the needed items can be ordered at the proper times back-dated from the scheduled assembly dates.
B. This is a benefit of MRP. The manufacturing process is more automated, since it is not necessary to manually calculate what needs to be ordered and when. This makes the process faster and less subject to manual calculation errors.
C. This is a benefit of MRP. MRP is a "push" inventory management system. Direct materials are ordered based upon projections of future sales. If the company's sales department is not already forecasting future product sales, an MRP system will force it to begin doing so. Anything that spurs better planning in an organization is of benefit to the organization.
D. This is a benefit of MRP. Direct materials can be ordered at the appropriate time in the production process, which should allow the company to keep raw materials inventory at the minimum required level. This limits the amount of cash that is tied up in raw materials inventory.
