MRP Explosion: In Materials Requirement Planning (MRP), an order by item (i.e. what item, by
when and how many or how much) is generated by procuring the item data with the help of Bill
of Materials (BOM) which is in accordance with the production plan. Structural information of
how the items are related to each other present in BOM and item information (such as lot size
rule) as well as tactical information about planned production and inventory in/out/on-hand is
specified. With the help of all this information, one can easily calculate what should be done, in
terms of when to place orders with external or internal suppliers, and what should be the size
of those orders so that planned production can always be achieved and the sales orders can be
met with. This process of calculating the required orders is referred to as MRP Explosion since it
produces materials requirements. MRP is not cost-driven unlike the MPS system. Instead MRP
is stockout-driven using the lot size rule so as to ensure sufficient stock is remaining and
reordering can be delayed as much as possible.

ERP: Enterprise Resource Planning (ERP) is a management software that enables an
organisation to utilise a system of integrated applications so as to manage the business and
automate many back office functions in relation with technology, services and human
resources. ERP systems therefore allow the organisation to view the operations as a whole and
ensures there’s a single comprehensive database which is accessible to all facilitating error-free
transactions and production. Certain areas of the system have restricted access. This facilitates
data monitoring anytime anywhere for the managers. Since various modular applications are
linked, any related information gets automatically updated whenever a new information is
entered into the system as it works in real-time and is mediated by software and technology.

ERP systems are useful in tracking business resources - cash, raw materials, production capacity
- and the status of business commitments: orders, purchase orders and payroll. It is widely used
in manufacturing, banking, hospitals, hotels, e-commerce and even telecom companies.
Resource Planning for Service Providers: Just as manufacturers, the service providers also need
to plan their resources and in contrast to finished goods, services cannot be inventoried, but
must be provided on demand. In order to plan resources, service organisations therefore focus
on managing the capacity to serve their customers by using dependent demand and bill of
resources.

Dependent demand occurs because the quantity required is a function of the demand for other
items held in inventory. This is used in airlines, restaurants, hotels and hospitals primarily. An
example of a dependent demand in service is operating suite at a hospital. A bill of resources
(BOR) is a record of all the required material, equipment, staff, time, and other resources
needed, the parent-component relationships and the usage quantities. It is similar to BOM in a
manufacturing firm. An example of facilitating goods for BOR in a hotel would include towels
and toiletries.