Key Components of MRP
Bill of Materials (BOM): A comprehensive list detailing the raw materials, components, and subassemblies needed to produce a finished product.
Master Production Schedule (MPS): A plan that outlines what needs to be produced, in what quantities, and when.
Supply Calculations
The main goal is to give organizations a view into how much inventory is needed to support current demand/forecast. The schedules can display in weekly totals or monthly to yearly aggregates.
As demand changes, so does the production schedule. This allows suppliers and procurement tasks to gain confidence and act quickly to changes. It also allows a full view of inventory shortfalls and too much production.