What technique uses bill of materials data, inventory data, and the master production schedule to calculate material requirements and release replenishment orders?

• A. Master schedule
• B. Materials requirements planning (MRP)
• C. MRP II
• D. CRP

Answer: (B)

Materials Requirements Planning is the technique that uses three main data sources—the bill of materials, the master production schedule, and inventory records—to figure out what materials are needed, in what quantities, and when to release replenishment orders. The master production schedule tells you when finished goods must be produced and in what quantities. The bill of materials shows how those finished goods are built from components and subassemblies, with the quantities required of each. Inventory data tells you current on-hand and on-order status, plus lead times and safety stock. MRP combines these inputs to explode the MPS through the BOM, determine gross requirements for each material, subtract on-hand and scheduled receipts to get net requirements, apply lead times, and generate planned or released orders to purchase or manufacture the needed items. This specific activity is what distinguishes it from simply planning the finished products (the master schedule), from broader enterprise planning that includes capacity (MRP II), or from capacity-focused planning (CRP).