MATERIALS REQUIREMENT PLANNING (MRP)

MRP IS A SYSTEM OF PLANNING AND SCHEDULING THE TIMEPHASED MATERIALS REQUIREMENT FOR PRODUCTION
OPERATIONS.

PROACTIVE
WHAT WILL I NEED IN THE FUTURE?
HOW MUCH AND WHEN
OPPOSING

REACTIVE
WHAT SHOULD I DO NOW

MATERIALS REQUIREMENT PLANNING (MRP)

OBJECTIVES
1) INVENTORY REDUCTION
2) REDUCTION IN PRODUCTION & DELIVERY LEAD TIME
3) REALISTIC COMMITMENT
4) INCREASED EFFICIENCY (COORDINATION AMONG VARIOUS WORK
CENTERS)

MRP SYSTEM
1. MASTER PRODUCTION SCHEDULE (MPS)

Input to MRP

Identifies the Quantity of Each End Product

When It is Used

MRP SYSTEM (Cont.)

2. BILL OF MATERIALS (BOM)

How Each End Product is Manufactured

Product Structure
Specification of Subcomponents, Sequence of Buildup, Quantity in Each
Finished Units

End
products

A
B

C
Components

D
E

F
B

Demand Dependency

Components
End Products
Components

2C

MRP SYSTEM (Cont.)

3. INVENTORY STATUS FILE
Up-to-date File of the Inventory Status of Each Item in
Product Structure, (e.g., Id. Number, Lead Time, Safety Stock,
Reserve, etc.)
4. MRP PROCESSING LOGIC
Items Required (Gross Requirement)
How Many from Inventory are Available
Net Quantity Planned (Planned Order Receipts)
Order for the New Shipment (Planned Order Release)

MRP PLANNING SYSTEM

MPS

ISF

MRP

BOM

ORDER
RELEASE
REQUIREMENT

ORDER
RESCHEDULING
(EXPEDITE,
DEEXPEDITE,
CANCEL)

PLANNED
ORDER
(FUTURE)

Legends:
MPS
ISF
BOM

: Master Production Schedule

: Inventory Status File
: Bill of Materials

MANAGEMENT INFORMATION FROM MRP

ITEM IDENTIFICATION: # 3201 MOUNTING BRACKET
LEAD TIME: 3 WEEKS
ON HAND: 100
SAFETY STOCK: 50

Management Information

WEEK
1

GROSS REQUIREMENT

400

500

NET REQUIREMENTS

350

500

PLANNED ORDER RECEIPTS

350

500

SCHEDULED RECEIPTS
AVAILABLE FOR NEXT PERIOD

PLANNED ORDER RELEASES

50

50

350

50

50

500