This document discusses Material Requirements Planning (MRP) and its importance. MRP is a computer-based production planning and inventory control system that aims to ensure the right materials are available when needed. MRP uses inputs like the master production schedule, bill of materials, inventory levels, lot sizes, and safety stocks to calculate material requirements and output recommendations for production amounts, staffing levels, and projected inventory balances. Implementing MRP can reduce inventory levels and costs, improve scheduling accuracy, and increase productivity by preventing component shortages.

1. P R E S E N T E D B Y :
M . P R A D E E P A
V . V I N I T H A
J . J O H N B R I T T O
E . G O W T H A M A N
MATERIAL RESOURCE
PLANNING &
ITS IMPORTANCE

2. MRP
 MRP is a computer-based production
planning and inventory control system.
 Material control system that attempt to keep
adequate inventory level to ensure the
required material available when needed.

3.  The main theme of MRP is to “ getting the
right quantity of the right material at the
right time ”
 MRP will provide you with the ability to be
pro-active rather than re-active in the
management of your inventory levels and
material flow.

4. Inputs to MRP
 MRP is calculated based on the following inputs
Master production schedule.
Bill of material.
 Quantity on hand.
 lot size.
Inventory level.
Safety stock.

5. MPS
 A Master Production Schedule is the plan that a
company has developed for production, inventory,
staffing etc.
 A Master Production Schedule is the master of all
schedules. It is a plan for future production of end
items.
 The Master Production Schedule will drive detailed
material and production requirements in
the MRP module.

6. Input of MPS
 Forecast Demand.
 Production Costs.
 Inventory Costs.
 Customer Orders.
 Inventory Levels.
 Production Lead Time.

7. Output of MPS
 Amounts to be Produced.
 Staffing Levels.
 Quantity Available.
 Projected Available Balance.

8. Lot size
 The quantity of items required for an order. The
order may be either purchased from a vendor or
produced in house.
 Lot sizing is the process of specifying the order
size.

9. Bill of material
 A bill of materials (BoM) is a list of the parts or
components that are required to build a product.
 The BoM provides the manufacturer's part number
(MPN) and the quantity needed for each component.
 BOM is a multi-level document that provides build
data for multiple sub-assemblies (products within
products) and includes for each item.
 It may also include attached reference files, such as
part specifications, CAD files and part drawings.

10. Quantity on hand
 The total number of stock-keeping units that are
physically located in the warehouse location at the
current time.
 This includes items that are already allocated to
fulfilling production needs or sales orders. So, this
number may differ from the quantity available in
hand.

11. Safety stock
 Safety stock is an additional quantity of an item held
in the inventory.
 In order to reduce the risk that the item will be out of
stock.
 safety stock act as a buffer stock in case the sales are
greater than planned and or the supplier is unable to
deliver the additional units at the expected time.

12. Inventory level

13. Importance of MRP
 Reduced Inventory Levels.
 Reduced Component Shortages.
 Improved Shipping Performance.
 Improved Productivity.
 Simplified and Accurate Scheduling.
 Reduced Purchasing Cost.
 Reduced Lead Times.
 Reduction in Excess Inventory.
 Improved Calculation of Material Requirements.