MRP is a computer-based planning system developed in the 1960s that translates a master schedule for finished goods into time-phased requirements for raw materials, work in progress, and finished goods. It uses a bill of materials and master production schedule as inputs to determine dependent demand for components and subassemblies. The MRP process outputs include planned order releases, inventory records, and exception and planning reports to help manage production resources, deliver products on time, and decrease inventory costs through optimal planning.
2. WHAT IS MRP?
• COMPUTER BASED PLANNING SYSTEM
• DEVELOPED DURING 1960’S
• TRANSLATES MASTER SCHEDULE REQUIREMENT FOR END ITEMS
• INTO TIME-PHASED REQUIREMENTS
• PLANNING OF REQUIREMENTS FOR PRODUCTION:
RAW MATERIAL
WORK IN PROGRESS
FINISHED GOODS etc..
5. DEPENDENT DEMAND
• DEMAND FOR ITEMS THAT ARE
SUBASSEMBLIES OR COMPONENT
PARTS TO BE USED IN
PRODUCTION OF FINISHED GOODS
• ONCE THE INDEPENDENT DEMAND
IS KNOWN, THE DEPENDENT
DEMAND CAN BE DETERMINED
6. MASTER PRODUCTION SCHEDULE (MPS)
MASTER PRODUCTION SCHEDULE
(MPS) IS A PLAN FOR INDIVIDUAL
COMMODITIES TO BE PRODUCED
IN EACH TIME PERIOD SUCH AS
PRODUCTION, STAFFING,
INVENTORY, ETC. IT IS USUALLY
LINKED TO MANUFACTURING
WHERE THE PLAN INDICATES
WHEN AND HOW MUCH OF EACH
PRODUCT WILL BE DEMANDED.
7. BILL OF MATERIALS
A bill of materials or product
structure is a list of the
raw materials, sub-
assemblies, intermediate
assemblies, sub-
components, parts, and the
quantities of each needed to
manufacture an end product.
