MRP (Chapter 12)

Material requirements planning (MRP): Computer-based information system that translates

master schedule requirements for end items into time-phased requirements for subassemblies,
components, and raw materials. The preparation of material requirements (MRP) is a computer-
based inventory management system designed to increase organizational efficiency. Companies
use inventory requirements-planning systems to forecast and schedule deliveries of raw
materials.

Overview of MRP: Material requirement planning (MRP) is a backward planning information

system. The MRP helps companies manufacturing articles in lots to have the correct content
available in the right quantities at the right time. Although the material is necessary, the
organization must also be able to process the material in time.

 MPR Inputs:
 Master Production Schedule
 Time-phased plan specifying timing and quantity of
production for each end item.
 Material Requirement Planning Process
 MRP Processing: The MRP process is intended to tell managers how and
when raw materials or parts necessary to fulfill manufacturing orders are
being made. The MRP method takes the order of business for the
manufacturing of a good from the master production schedule as its basis
of reality, and works backwards in order to plan products and processes. In
the end, MRP maintains maximum dependency inventory levels in order
to reduce waste and cost of transportation while meeting current and
potential demands.
 MRP Output:
 Designed schedule for ordering a timetable for the sum of
each material to be ordered in any time span. The order is
 available from manufacturers or from production orders on
production departments for parts or sub-assemblies.
 Expected Order Changes (re-establishment notices).
 Planning studies, such as inventory estimation, purchase
engagement studies, inventory results, etc.
 For the requirements of project capability.