MRP

Material Requirements Planning (MRP) is the calculation that translates demand (sales orders + forecast) into a time-phased plan of material purchases and production. Given a forecast of finished goods needed by date, MRP works backwards through the BOM and lead times to produce a recommendation: buy X kg of raw material A by date Y; produce Z units of sub-assembly B by date W.

Modern MRP (sometimes called MRP II) integrates with production scheduling, capacity planning, and supplier collaboration — and is increasingly AI-augmented to account for variable lead times, supplier reliability, and demand uncertainty rather than treating these as fixed.