Material requirement planning

What is MRP?

A technique for determining the quantity and timing of dependent demand items is called Material Requirement Planning

To understand MRP, the following questions are addressed in MRP processing:

1. What do we want to produce and when(Provide by Master Production schedule)
2. What components are required to make it(Bill of materials and how many)
3. How many are already scheduled to be(Inventory status file available in each future period)
4. How many more we need to obtain for(Different in required and available each future period)

Functions of MRP

1. Order Planning and Control: When to release orders and for what quantities of materials or components
2. Priority Planning and Control: How the expected date of availability compared to the need date for each component.
3. Provision of a basis for planning capacity requirements and developing a broad business plan.