No Marshmallows, Just Term Papers
IEOR 4000: Production Management
Professor Guillermo Gallego
Material Requirements Planning (MRP)
Material Requirements Planning (MRP) is a computer-based production planning and inventory
control system. MRP is concerned with both production scheduling and inventory control. It is
a material control system that attempts to keep adequate inventory levels to assure that required
materials are available when needed. MRP is applicable in situations of multiple items with complex
bills of materials. MRP is not useful for job shops or for continuous processes that are tightly linked.
The major objectives of an MRP system are to simultaneously:
1. Ensure the availability of materials, components, and products for planned production and for
2. Maintain the lowest possible level of inventory,
3. Plan manufacturing activities, delivery schedules, and purchasing activities.
MRP is especially suited to manufacturing settings where the demand of many of the components
and subassemblies depend on the demands of items that face external demands. Demand for end
items are independent. In contrast, demand for components used to manufacture end items depend
on the demands for the end items. The distinctions between independent and dependent demands
are important in classifying inventory items and in developing systems to manage items within each
demand classiﬁcation. MRP systems were developed to cope better with dependent demand items.
The three major inputs of an MRP system are the master production schedule, the product
structure records, and the inventory status records. Without these basic inputs the MRP system
The demand for end items is scheduled over a number of time periods and recorded on a master
production schedule (MPS). The master production schedule expresses how much of each item is
wanted and when it is wanted. The MPS is developed from forecasts and ﬁrm customer orders for