Internal Supply
From MPS to material plan
The master production schedule states what will be built, in what quantity, and when, for end items or option families - inside the production plan and time fences. It separates forecast from actual demand and uses available-to-promise to commit output to customers. MRP then explodes the MPS through the bill of material (low-level coded, offset by lead time) to generate planned orders.
Net requirements = gross requirements − on hand − scheduled receipts + safety stock. Lot sizing (lot-for-lot, EOQ, fixed quantity, period order quantity) converts net requirements into orders, and action messages tell the planner what to release, expedite, or defer. Firm planned orders protect the near-term horizon; pegging traces a requirement back to its source.
Capacity
Rough-cut capacity planning validates the MPS against key resources before release; capacity requirements planning tests the MRP against work center loads. Both are normally infinite-loading techniques - the planner resolves overloads.
Traps
- Letting a forecast drive MRP directly instead of the MPS.
- Omitting safety stock, scrap/yield factors, or scheduled receipts when netting.
- Confusing RCCP (before release, key resources) with CRP (after MRP, all work centers).
- Ignoring lot-size effects: big lots create lumpy loads and excess inventory.
- Believing MRP plans capacity - it plans material, capacity is checked separately.
Worked example
Gross requirement 500 in week 4; on hand 120; scheduled receipt 80 in week 3; safety stock 50; lot-for-lot. Net = 500 − 120 − 80 + 50 = 350 units. With a 2-week lead time, the planned order releases in week 2. Rule of thumb: safety stock is a floor that must remain after netting, not a buffer to be consumed.