--- title: "MRP concept, inputs and outputs" subject: "Industrial Engineering and Management" chapter: 5 key: "semester_6/industrial_engineering_and_management:mrp-concept-inputs-and-outputs" source: https://www.bctengineer.com/q/semester_6/industrial_engineering_and_management/mrp-concept-inputs-and-outputs site: BCT Engineering --- # MRP concept, inputs and outputs Industrial Engineering and Management · Chapter 5: Material Requirement Planning (MRP I and MRP II) - Asked in: year not given, 6 marks - Video: [What is the Material Requirement planning (MRP)? | MRP Process in 8 Minutes!](https://www.youtube.com/watch?v=u3P6YMI5Ah0) — Educationleaves - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_6/industrial_engineering_and_management/mrp-concept-inputs-and-outputs - Whole chapter: https://www.bctengineer.com/md/semester_6/industrial_engineering_and_management/chapter-5 ## Question Explain the concept of Material Requirement Planning (MRP). Describe its inputs, outputs, benefits and applications. ## Short answer MRP converts master schedule into time-phased material requirements using BOM and inventory data. Inputs: MPS, BOM, inventory records. Outputs: planned order releases, rescheduling notices, reports. Benefits: lower inventory, better delivery, fewer stockouts. Used in assembly industries. ## Answer **MRP** is a computer-based planning system that converts the master production schedule of end products into time-phased requirements of the sub-assemblies, components and raw materials. It answers: what to order, how much, and when. It is used for **dependent demand** items (items whose demand depends on the end product), unlike reorder-point systems for independent demand. #### Inputs ```text Master Production Bill of Materials Inventory records Schedule (MPS) (BOM) (on hand, on order) \ | / +--------> MRP LOGIC <-------------+ | Planned order releases | Reschedule notices | Reports ``` 1. **Master production schedule (MPS):** quantity and date of each end product. 2. **Bill of materials (BOM):** product structure showing parts per unit at each level. 3. **Inventory status file:** on-hand stock, scheduled receipts, lead times, lot-size rules and safety stock. #### Working Gross requirements are exploded level by level; net requirements are found as gross minus (on hand + scheduled receipts); orders are planned and offset backward by the lead time. #### Outputs - Planned order releases (what to order and when). - Order rescheduling notices (move earlier or later). - Cancellation notices and exception reports. - Inventory and performance reports. #### Benefits - Lower inventory and work-in-process. - Better delivery performance and customer service. - Fewer stock-outs and rush orders. - Better use of labour and machines; realistic schedules. - Quick response to change in MPS. #### Applications Assembly industries with many components and long lead times: machinery, automobiles, electronics, aircraft, furniture. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. What does MRP do? A. Converts the master production schedule into time-phased requirements of components and materials B. Sets the reorder point for finished goods using past sales C. Schedules machine maintenance D. Forecasts customer demand Answer: A. MRP explodes the MPS into what to order, how much and when for sub-assemblies, components and raw materials. (Key point: Purpose of MRP) 2. For which type of demand is MRP used, in contrast with reorder-point systems? A. Independent demand of finished goods only B. Dependent demand of items that depend on the end product C. Random demand of spare parts only D. Demand from forecasts of the market only Answer: B. Components' demand depends on the end product's schedule, so MRP calculates it; reorder-point systems suit independent demand. (Key point: Dependent demand) 3. Which set lists the three main inputs of MRP? A. Sales forecast, cash budget, wage sheet B. Work study, layout, ergonomics C. Master production schedule, bill of materials, inventory status file D. Planned order releases, rescheduling notices, exception reports Answer: C. The inputs are the MPS, BOM and inventory records; the others listed are outputs. (Key point: Inputs) 4. How are net requirements found? A. Gross requirement plus on-hand stock B. Gross requirement minus (on hand + scheduled receipts) C. Gross requirement times lead time D. On-hand stock minus safety stock only Answer: B. Net = gross - (on hand + scheduled receipts); orders are then offset backward by lead time. (Key point: Working of MRP) ## Related in Industrial Engineering and Management - [MRP II closed loop system](https://www.bctengineer.com/question.md?key=semester_6%2Findustrial_engineering_and_management%3Amrp-ii-manufacturing-resource-planning) — Industrial Engineering and Management, chapter 5 ## Related in other subjects - [Charter tools, inputs and outputs](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Acharter-tools-inputs-outputs) — ICT Project Management, chapter 7 - [Benefits and problems of reuse; reuse planning](https://www.bctengineer.com/question.md?key=semester_5%2Fsoftware_engineering%3Areuse-benefits-problems) — Software Engineering, chapter 5 - [DSM concept; planning and implementation steps](https://www.bctengineer.com/question.md?key=semester_7%2Futilization_of_electrical_energy%3Adsm-concept-planning-implementation) — Utilization of Electrical Energy, chapter 6 - [Capital structure planning concept](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Acapital-structure-planning-concept) — Project Engineering, chapter 6, asked 2×