MRP Definition
Material requirements planning (MRP) is a system for calculating the materials and components needed to manufacture a product. It is typically used in manufacturing environments where production planning is necessary to ensure that materials are available when needed.
An MRP system starts with a master schedule that indicates when each finished product is required. The master schedule takes into account the Lead time of each component as well as the assembly time of the finished product. Based on the master schedule, an MRP system will generate a list of raw materials and components that are needed to meet the demand.
MRP systems are important in manufacturing because they help to avoid stock outs, which can lead to production delays and lost sales. By ensuring that materials are available when needed, MRP systems help to keep production on schedule and minimize disruptions.
