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The Calculation Formula in the MRP Module

The core of the MRP module is the formula that calculates the quantities in Production and Purchase Order Plans. These are the quantities of each Item that you need to produce or purchase in order to meet Sales Forecasts and, if you are using Stock Policies, to ensure the required quantity of each Item remains in stock at the end of each week or month.

If you have included Items that you need to produce (using Productions) in your Sales Forecasts, the formula will be used by the Create Production Plan - Preview report and the 'Create Production Plan' Maintenance function to calculate the quantity of each Item that you need to produce in each week or month. Please refer here for more details and an example.

If you have included Items that you need to purchase for resale in your Sales Forecasts, the formula will be used by the Create Purchase Order Plan - Preview report and the 'Create Purchase Order Plan' Maintenance function to calculate the quantity of each Item that you need to purchase in each week or month. This will include calculating the quantities of components that you need to purchase in order to produce the Items in Production Plans. This requires that you run the 'Create Production Plan' Maintenance function for a particular period and mark the resulting Production Plan(s) as OK before running the 'Create Purchase Order Plan' function. Please refer here for more details and an example.

The formula will calculate weekly or monthly figures depending on the Period Type that you have specified in the Forecast Settings setting.

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The Calculation Formula in the MRP module: