Material Requirement Planning (MRP)

Material Requirement Planning has become a way of life in production and inventory management.

This planning approach is still the standard across the globe for determining what to buy an make, how much to buy and make, and when to buy and make it.

Material planning in MRP is coordinated centrally. The starting point is the demand for end product. The Master Production Scheduled (MPS) contains information about what quantities of each end product will be produce at what time within the planning horizon.

The time basis is discrete and conventionally a one well period or time bucket is used. The other type of input in MRP system, such as Bill of Materials BOM, production and procurement lead times, or the current inventory status also important for material planning.

The MPS is exploded to downstream items through the product structures BOM. It will generates replenishment orders for uncritical components and parts in a multistage production environment.
Material Requirement Planning (MRP)