MRP is a materials requirements planning system developed in 1964 to help manufacturing companies manage inventory. It uses a master production schedule, bill of materials, and inventory records as inputs to determine when to release new orders and reschedule open orders. The objectives of MRP are to ensure materials and products are available when needed, maintain low inventory levels, and plan manufacturing, delivery, and purchasing activities. It operates by processing input files through the MRP system to generate outputs like planned order schedules. Potential issues include lot sizing, safety stock, scrap allowance, and updating inaccurate files.

1. MATERIALS
REQUIREMENT
PLANNING

2. In 1964, Joseph Orlicky developed MRP
Black & Decker in 1964 used MRP
MRP is an Inventory Management System
Suits to manufacturing industries
System based as well as hand based

3.  MRP says
a) What you need?
b) What you have to get and when?
 MRP uses Master Production Schedule, Bills of Material &
Inventory Records as Inputs.
 Outputs
a) When to release new orders
b) When to reschedule open orders

4. Overview of MRP System
Product
Structure File
Inventory
Master File
Master
Production
Schedule
Purchase Orders
Manufacturing
Orders
Various Reports
MATERIALS
REQUIREMENT
PLANNING

5. Objectives of MRP
MRP is intended to meet 3 objectives :
1. Ensure materials are available for production and
products are available for delivery to customers.
2. Maintain lowest possible material and product levels
in stores.
3. Plan manufacturing activities, delivery schedules and
Purchasing activities.

6. Operation of the MRP System
Master Production
Schedule
Inventory Status
Bill of Material
Reports
Inventory
Transactions Data
Planned Order
Schedule
MRP
Systems
Input (files) Processing Outputs

7. Issues in MRP
 Lot-Sizing
 Safety Stock
 Scrap Allowance
 Pegging
 Cycle Counting
 Updating
 Time Fence

8. Requirements
A Computer and necessary Software Programs
Accurate and Up to Date
(i) Master Schedules
(ii) Bills Of Materials
(iii) Inventory Records
Integrity of File Data

9. Benefits
Minimizing the inventory level
Determining the material requirement and its
management
Choosing the most economical way
Allocation of production time
Information by MRP
Useful for employers, workers, production managers,
plant foreman, customer representative
Capacity to make changes in Master Production

10. Problems in using MRP
Preparation of MPS
Maintaining accurate BOM files
Incorrect stock status
Unrealistic lead times

11. Problems in designing the MRP
system
Inadequacies of software chosen
Deficient system design
Improper and untimely information flow

12.  MRP is more useful in Process-Focused systems which have
long process times and multi-stage production steps.
 MRP offers advantages in inventory planning when the lot sizes
are small and demand is highly variable.
 Basically MRP is a computerized information system for POM.
It is best applied when production systems are well managed
and when a comprehensive production and inventory planning
is needed.
Thank-you