Which statement best describes the relationship between Material Requirements Planning (MRP) and Just-In-Time (JIT) inventory systems?

• A. MRP uses demand forecasts to plan material needs; JIT relies on fixed schedules and maintains high inventory.
• B. MRP uses demand forecasts to plan material needs; JIT minimizes inventory by ordering materials as needed; MRP is forecast-driven and JIT is pull-based.
• C. MRP is pull-based and JIT is forecast-driven.
• D. MRP is applicable only to services; JIT is used only in manufacturing.

Answer: (B)

MRP and JIT embody two different ways to control material flows. Material Requirements Planning uses forecasts to determine what materials are needed and when, using a bill of materials and a master production schedule to plan ahead. Just-In-Time aims to minimize inventory by manufacturing and delivering only as needed, pulling material into production in response to actual demand or consumption signals (often via Kanban).

So the statement that captures the relationship is that MRP uses demand forecasts to plan material needs, while JIT minimizes inventory by ordering materials as needed, with MRP being forecast-driven and JIT being pull-based. This reflects the contrast between planning ahead based on forecasted demand and producing in response to real-time consumption.

Other options miss the mark because they reverse roles or mischaracterize where each system is used: JIT is not built on fixed schedules with high inventory, MRP is not a pull-based system, and MRP isn’t limited to services while JIT isn’t exclusive to manufacturing.