Material Requirements Planning (MRP) is a computer-based production planning and inventory control system used to manage manufacturing processes. MRP was introduced in the 1970s and aims to ensure availability of materials for production, maintain low inventory levels, and plan manufacturing activities. MRP involves determining material requirements based on a master production schedule, generating purchase and manufacturing orders, and providing reports. Feedback from production is incorporated through closed loop MRP to improve planning accuracy.

1. By
Nisha Agarwal (DM-11-008)
Lavanya (DM-11-054)
Jagadish (Dm-11-042)

2. Material Requirements Planning was introduced in the
1970’s. Much of the credit goes to three individuals by
the names of
Joseph Orlicky
George Plossl
Oliver Wight
American Production and Inventory Control Society

3.  Material Requirements Planning (MRP) is a
computer-based production planning and inventory
control system. MRP is concerned with both
production scheduling and inventory control.
or
 Material requirements planning (MRP) is
a production planning, scheduling,
and inventory control system used
to manage manufacturing processes.

4.  Ensure the availability of materials,
components, and products for planned
production and for customer delivery
 Maintain the lowest possible level of
inventory.
 Plan manufacturing activities, delivery
schedules, and purchasing activities.

5. 1. MRP is a method for ordering components than the
independent demand inventory models
2. MRP : It is a phase in the development of
computerized methods for planning the use of
company resources , including scheduling raw
materials, vendors, production equipment and
processes.
3. MRP provides a method that helps keep order due
dates valid even after the orders have been released to
the shop floor or outside vendor.
4. MRP systems can detect when the due date of an
order – the date the order is scheduled to arrive- is out
of alignment with its need date , the date the order is
actually required.

6. Product
Structure
File
Master
Production
Schedule
Inventory
Master File
Material
Requirements
Planning
Manufacturing
Orders
Purchase
Orders
Various
Reports

7. MRP
Closed Loop
MRP
MRP II
ERP
Schedule Materials
Schedule Materials
Incorporate Feedback
Schedule & Purchase Materials
Coordinate w/ Mfg Resources

8.  Closed loop MRP is a system which grew out of‐
material requirements planning (MRP) and which
primarily allows plans to be checked against capacity
to determine whether they are realistic and achievable.
 Closed loop MRP is the intermediate stage between‐
material requirements planning and manufacturing
resources planning

9. Production Planning
Master Production Scheduling
Material Requirements Planning
Capacity Requirements Planning
Realistic?
No
Feedback
Execute:
Capacity Plans
Material Plans
Yes
Feedback

10.  Closed loop MRP is used to determine how well
the planning factors & tools are working, MRP
planners need feedback from the shopkeeper and
purchasing department.
 With effective feedback MRP planner can revise
the planning factors and techniques so that better
materials can be developed for future.

11.  Availability of the right materials required for production,
on time
 Little, if any, excess inventory can be reduced
 Timely delivery of manufactured goods to customers
 Optimal use of manufacturing resources (equipment
downtime reduced)
 Decrease in capital cost due to decreased inventory levels
and optimal use of production resources
 Collecting the business data for analysis and better planning

12.  High costs and technical complexities in implementation. In
addition, organizations, which use an MRP system need to
spend considerable effort on installing necessary equipment
(computers), training personnel, modifying the software to
serve their specific needs, validating, testing, and
eliminating possible errors, and maintaining the software.
 The time required for planning and implementing an MRP
system is generally very long.
 Data entry and file maintenance requires considerable
inputs in the form of training and education of the
personnel.
 Dependence on forecast values and estimated lead-time can
sometimes be misleading.