Material Requirements Planning (MRP)

The basis for material planning is the forecast demand for the end products. Once the demand forecast
is made, it is possible go through the excerse of material planning. Bill of materials is a document which
shows list of materials required, unit consumption location code for a given product. An explosive chart
is a series of bill of material grouped in a matrix form so that combined requirements for different
components can be done requirements of various materials are arrives at from the demand forecast,
using bill of materials, through explosion charts. Thus material requirement plan will lead to be the
development of delivery schedule of the materials and purchasing of those material requirements

MRP is not a system, by itself. It is simply a technique, or an algorithm, and formsa part of the
manufacturing planning and control system. MRP does the followingvaluable jobs:

 Determines the quantities of each item required for the manufacture of all the end products
planned to be produced, and this includes purchased components and sub-assemblies, in-house
manufactured components and subassemblies and raw materials.
 Suggests the proper time to release orders, namely purchase orders for raw materials and
bought-out components and shop orders for production activities like machining, fabrication
and assembly.
 Indicates the dates by which each of the above items are needed (to be delivered for further
processing), and thus provides the necessary information for material control.
 Provides information to assist the planning of capacity requirements and ma-chine and work
centre loading.