Material Requirements Planning

Understanding resource planning begins with the concept of dependent demand, which sets it apart from the techniques covered in Chapter 9, “Inventory Management.” Material requirements planning (MRP) is a computerized information system developed specifically to help manufacturers manage dependent demand inventory and schedule replenishment orders. The key inputs of an MRP system are a master production schedule, a bill of materials database, and an inventory record database, as shown in Figure 11.1. Using this information, the MRP system identifies the actions planners must take to stay on schedule, such as releasing new production orders, adjusting order quantities, and expediting late orders.

Figure 11.1

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