A simple summary of the Material Requirements Planning (MRP) process

steps is as follows:

1. The orders and forecast for each time period, usually 1 day, for each
end item are subtracted from the stock on hand plus any scheduled
receipts to give the day to day projected available balance.
2. If the projected available balance falls below zero, or the safety stock
if there is one, the MRP program will suggest rescheduling an
existing order. If there are no orders to re-schedule, MRP will create
a planned order to correct the projected available balance.
3. The planned order quantity is set to either just enough to restore the
projected available balance (lot for lot), a fixed quantity multiple (lot
size) or can be a number of more complex calculations involving
looking periods ahead, minimums, maximums, multiples etc..
4. All planned orders, offset by the lead time either create purchase
orders or, for manufactured parts, are exploded into the component
parts using the parts bill of material.
5. Planned orders at one level are exploded into projected gross
requirements at the next level down in the bill of material.
6. The above steps are repeated for all components. The demand for
components is generally call "projected gross requirements" which is
a combination of orders and forecast.

This is, of course, a very simplified explanation.

Top level items should be planned using a Master Production Schedule where the
planner is in control not the computer although the underlying logic is the same.
Master production scheduling is a key element of the change from Material
Requirements Planning (MRP) to Manufacturing Resource Planning (MRPII) along
with capacity planning. I am afraid you will have to buy my book "Business
Excellence" (more details) to really understand the MRP, MRPII / ERP process.

The best education courses on MRP are either the Business Excellence
Fundamentals course; there are 1 day and 4 day versions of this course or
the 2 day Material Requirements Planningcourse. Both these courses do
not require any prior knowledge of material planning methods or systems.

Contain prepare by aniruddha jha | MRP