Material Requirements Planning

(MRP)

MRP was the first widely used production planning software and focused on materials (not production capacity or cost). MRP takes target dates for finished products, and works backwards to determine a production plan and raw material purchasing plan. The MRP process expands each bill of material, adjusts for inventory quantities on hand or on order, and offsets the net requirements by the appropriate lead times. The result is a list of recommendations to release replenishment orders (purchase orders) for materials.