MRP 1 & MRP 2

Presented By-
Krutika Ashtikar 2018004
Akshata Jagdale 2018052
Introduction

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. The major objectives of an MRP system are to
simultaneously:
1. Ensure the availability of materials, components, and products for planned
production and for customer delivery
2. Maintain the lowest possible level of inventory
3. Plan manufacturing activities, delivery schedules, and purchasing
activities
Purpose Of MRP

• Inventory
• Priorities
• Capacity
Nature of Demands

• Independent demand
Demand for an item that is unrelated to the demand for other
items. Demand for finished goods, parts required for destructive
testing, and service part requirements are examples of independent
demand.
• Dependent demand
Demand that is directly related to or derived from the bill of
material structure for other items or end products. Such demands
are calculated and need not be forecasted.
MRP Inputs
• Master Production Schedule (MPS)
• Bills of materials (BOM)
• Inventory status file

MRP Outputs
Primary Outputs
• Planned Order Schedule
• Changes in Planned Order
Secondary Outputs
• Exception Reports
• Performance Reports
• Planning Reports
Benefits of MRP

• Keep inventory levels to a cost-effective minimum.

• Keeps track of inventory that is used.
• Tracks the amount of material that is required .
• Set safety stock levels for emergencies.
• Determine the best lot sizes to fulfill orders.
• Set up production times among the separate manufacturing
stages.
Evolution Of MRP2

• MRP 2 is a natural outgrowth of MRP 1

• Both material and time requirement are integrated within MRP 1
system.
• Beyond this, MRP 2 has been coined to ‘close the loop’ by
integrating financial, accounting, personnel, engineering and
marketing information along with production and control activities
of basic MRP systems.
MRP 2
Benefits of MRP 2

• More efficient use of resources

• Better priority planning
• Improved customer service
• Improved employee moral
• Better management information
THANK YOU