MATERIAL REQUIREMENTS PLANNING

MATERIAL REQUIREMENTS PLANNING

  00:34    Rahul R

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MATERIAL REQUIREMENTS PLANNING (MRP)

 Material Requirements Planning (MRP) is a computer-based technique for determining the quantity and timing for the acquisition of dependent demand items needed to satisfy the master schedule requirements. By identifying precisely what, how many, and when components are needed, MRP systems are able to reduce inventory costs improve scheduling effectiveness, and respond quickly to market changes.

MRP is a computer-based production planning and inventory control system. MRP is concerned with both production scheduling and inventory control.

The major objectives of an MRP system are to simultaneously:-

1. Ensure the availability of materials, components and products for planned production and for customer delivery,

2. Maintain the lowest possible level of inventory,

3. Plan manufacturing activities, delivery schedules and purchasing activities.

Prerequisite Inputs for MRP

There are three major inputs for an MRP system. They are:

1. Master production schedule,

2. Bill of Material

3. Inventory status records

Without these basic inputs the MRP system cannot function.

1. Master production schedule

The demand for end items is scheduled over a number of time periods and recorded on a master production schedule (MPS). The master production schedule expresses how much of each item is wanted and when it is wanted. The MPS is developed from forecasts and firm, the customer orders for end items, safety stock requirements and internal orders. MRP takes the master schedule for end items and translates it into individual time-phased component requirements.

2)A bill of materials (BOM)

A bill of materials (BOM) file gives the complete product descriptions and documents quantities of each component, part, ingredient, or raw material needed to make that product or sub-assembly. It is also called as the product structure tree.

3. Inventory status records

This comprises the item wise inventory records indicating the item as well as the quantities in stock, besides a host of other information with respect to every item in the inventory.