MATERIAL REQUIREMENT
PLAN
The Material Requirement Plan (MRP) is a plan for the
production and purchase of components used in making items in the master
production schedule. Companies use material requirements planning systems to
estimate quantities of raw materials and purchase or manufacturer specific
items.
The objective of MRP is to determine what components are
needed to meet the master production schedule and based on lead time to
calculate the periods when the components must be available
It determines the following :
- What to order
- How much to order
- When to order
- When to schedule deliver
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