Definition. Material Requirements Planning (MRP) is a computer-based production planning and inventory control system. MRP is concerned with both production scheduling and inventory control. It is a material control system that attempt to keep adequate inventory levels to assure that required materials are available when needed.

MRP is applicable in situations of multiple items with complex bills of materials. MRP is not useful for job shops or for continuous processes that are tightly linked. 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.

MRP is especially suited to manufacturing setting where the demand of many of the components and subassemblies depend on the demands of items that face external demands. Demand for end items are independent. In contrast, demand for components used to manufacture end items depends on the demands for the end items. The distinctions between independent and dependent demands are important in classifying inventory items and in developing systems to manage items within each demand classification.  MRP systems were developed to cope better with dependent demand items.

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