Supply Chain Concepts

materials requirements planning (mrp)

Major Topic Area: MRPII/ERP

mrp is a time-phased replenishment process used primarily for dependent demand items (raw materials, work in process).

The process utilizes the following inputs:

• bill of materials
• Master Production Schedule (MPS)
• inventory status
• planning parameters (i.e. safety stock, lead time)

MRP utilizes the planned MPS releases to generate the gross requirements for level one components. Net requirements are then calculated whenever projected inventory levels drop below the component's safety stock setting. Whenever net requirements are greater then zero, mrp plans a replenishment order.

The impact of all mrp replenishment orders is evaluated utilizing capacity planning techniques like capacity requirements planning (crp).

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