Demand
Sales orders and forecasts say what must be made.
Manufacturing
What is MRP?
Material requirements planning explained: how it works, what it needs and how it relates to ERP.
MRP in plain terms
MRP stands for material requirements planning. It is a method, usually run in software, for working out which materials a manufacturer needs, how many and when, so production can meet demand without holding too much stock.
MRP starts from what customers want, works back through each product's components and checks what's already in stock or on order. The result is a list of suggested production and purchase orders.
How MRP works
The three inputs and what MRP does with them.
Bill of materials
Lists every component needed for each product.
Stock and orders
What's on hand and already on order.
Netting
MRP subtracts available stock from requirements.
Lead times
Orders are timed so materials arrive when needed.
Suggestions
Planned production and purchase orders to approve.
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FAQ
Frequently asked questions
Material requirements planning. MRP II, a later extension, stands for manufacturing resource planning.
MRP plans materials and production. ERP manages the whole business, including finance, sales and purchasing, and usually includes MRP.
Demand (sales orders and forecasts), bills of materials, and stock and open order levels, along with lead times.
Yes. Business Central includes planning worksheets, bills of materials and production orders.