The mantra of health care reform in hospitals in the United States and elsewhere, the spiralling costs of health care, and the development of diagnostic‐related groups (DRGS) that define health services as “products” are influencing the strategic role of operations planning and control in hospital delivery systems. We developed a new operations planning and control system that we call “Hospital Resource Planning” (HRP). This system is based on the concept of DRGS and the familiar concept of manufacturing resources planning (MRP‐II). TO determine the potential feasibility of HRP, we gathered longitudinal data from two hospitals, one 300‐bed community hospital and one 1,100‐bed teaching hospital. Our exploratory study indicated that while the concept of MRP‐II can be transferred to hospitals, the traditional MRP logic has shortcomings. HRP advances prior research in three ways: (1) consideration of DRGS as products with a bill of resources structure that simultaneously incorporates both capacity and materials resources, (2) implementation of a hospital‐wide (versus a functional) planning and control'system, and (3) gross‐to‐net requirements logic based on notions of treatment staging. Other feasibility issues that we addressed pertain to a stochastic bill of resources, trends toward hospital product standardization, and the coordination of a central planning system with decentralized decision making. The paper concludes with a description of ar