Materials Requirement Planning

MRP system (1)
What is MRP?
MRP, also known as materials requirements planning constitutes a set of techniques that use bill of material, inventory data and the master production schedule to calculate requirements for materials.
How your business could benefit
MRP helps to control the types and quantities of materials purchase, plan which products are to be produced and in what quantities and ensure that they are able to meet current and future customer demand, all at the lowest possible cost. Making a bad decision in any of these areas will make the company lose money.
Why materials requirements planning?
MRP system helps in maintain minimum inventory level, with minimum inventory levels all associated cost will reduce, tracking become easy and ensure that economic order quantity is achieved for all lot orders, capacity utilization is smoothens and allocate correct time to products as per demand forecast.