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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:
- What do we want to produce and when(Provide by Master Production schedule)
- What components are required to make it(Bill of materials and how many)
- How many are already scheduled to be(Inventory status file available in each future period)
- How many more we need to obtain for(Different in required and available each future period)
Functions of MRP
- Order Planning and Control: When to release orders and for what quantities of materials or components
- Priority Planning and Control: How the expected date of availability compared to the need date for each component.
- Provision of a basis for planning capacity requirement and developing a broad business plan.
Video Source: YouTube
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