The material requirements planning (MRP) system provides the user with information about timing (when to order) and quantity (how much to order), generates new orders, and reschedules existing orders as necessary to meet the changing requirements of customers and manufacturing.
The system is driven by change and constantly recalculates material requirements based on actual or forecasted orders. It makes adjustments to deal with possible problems prior to their occurrence, unlike traditional control systems, which looked more at historical demand and reacted to existing problems.
Reference:
http://www.accessscience.com/abstract.aspx?id=409350&referURL=http%3a%2f%2fwww.accessscience.com%2fcontent.aspx%3fid%3d409350
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 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 is 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 cannot function.
The demand for end items is scheduled over a number of time periods and recorded on a master production schedule (MPS). The master production