MATERIAL REQUIREMENTS PLANNING (MRP) ENABLES MANAGEMENT TO TIME EFFICIENTLY THE ORDERING AND MANUFACTURING OF COMPONENTS AND SUBASSEMBLIES THAT COMPOSE COMPLETED PRODUCTS. THE 'CLOSED-LOOP' MRP HAS THREE COMPONENTS: THE 'FRONT-END' OF THE SYSTEM WHERE FORECASTS, ORDERS, CAPACITY CONSTRAINTS, AND OTHER CONSIDERATIONS ARE INTEGRATED INTO A MASTER SCHEDULE; THE COMPUTER CONNECTION, WHICH INVOLVES THE DEVELOPMENT OF PROCEDURES FOR ACCURATE INVENTORY RECORDS, BILLS OF MATERIAL, AND TRANSACTION REPORTING; AND THE 'BACK-END' OF THE SYSTEM, WHICH INVOLVES DETAILED PLANNNING AND CONTROL OF PURCHASING AND THE SHOP FLOOR TO ENSURE THAT 'FRONT-END' PLANNING IS ACCOMPLISHED. TWO SETS OF VARIABLES--UNCONTROLLABLE AND CONTROLLABLE--AFFECT THE DEGREE OF SUCCESS OF THE MRP. THE UNCONTROLLABLE VARIABLES ARE MARKET POSITION (THE DEGREE TO WHICH DEMAND IS STABLE OR SPORADIC), CONTROL OVER PRODUCT STRUCTURE (THE DEGREE TO WHICH PRODUCTS MUST BE DESIGNED TO CUSTOMER SPECIFICATION), AND CONTROL OVER THE PRODUCTION PROCESS (THE DEGREE TO WHICH THE PRODUCTION PROCESS INEVITABLY CONTAINS UNPREDICTABLES). CONTROLLABLE VARIABLES ARE A UNIFIED DATA BASE, ORGANIZATIONAL INTEGRATION, WORKING CAPITAL MANAGEMENT, MANAGERIAL LEADERSHIP, AND STRATEGIC MANAGEMENT. THE UNCONTROLLABLE VARIABLES DEFINE THE COMPLEXITY OF THE ISSUES ENCOUNTERED IN MRP, AND MANAGERIAL COMMITMENT TO THE MANIPULATION OF THE CONTROLLABLE VARIABLES DETERMINES THE OUTCOME. TWO CASE EXAMPLES ARE DESCRIBED. (RCB)