MRP is the planning tool in SAP which will look at all aspects of a material and is highly based upon the master data of the material.
MRP looks at current inventory, current requirements, and open purchase requisition/orders and so on. So if a material is required to satisfy a sales order and there is no inventory, MRP will create a planned order if the item is to be produced in house. This planned order can then be converted to a production order by the master scheduler.
If the item is to be procured, then MRP will create a purchase requisition which the Buyer will convert to a purchase order. This is just one scenario, the system is highly configurable and will do pretty much whatever you tell based on config and master data.
The main function of material requirements planning is to guarantee material availability, that is, it is used to procure or produce the requirement quantities on time both for internal purposes and for sales and distribution. This process involves the monitoring of stocks and, in particular, the automatic creation of procurement proposals for purchasing and production.
The following topics are covered in the rest of material;
MRP at Plant or MRP Area Level
Reorder Point Planning
MRP Run Procecure
Total Planning Run With MRP Controller and much more…
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