Glossary

Material Requirements Planning (MRP) was the first widely used production planning software 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.

In manufacturing and production, the word ‘materials’ is used to describe a manufactured product in all states of transformation, including raw materials. ‘Handling’ includes both movement and storage. Materials handling means the techniques and equipment used to move and store materials within and between manufacturing facilities and storage facilities such as warehouses.