MRP: Definitions of Technical Terms

Material Requirement Planning (MRP) is one of the rich functionalities of SAP Business One. It allows you to plan materials required to meet future demands. Suffice to say that, it generates recommendations for purchase orders for purchased items and production orders for produced items.

The following are some of the definitions of technical terms related to MRP :-

1. Lead time: This is the time it takes to calculate how long it takes to produce or purchase an item.

2. Order Multiple: This defines the size of the lots for the MRP.

3. Parent Production Order: This is an expected receipt from a production order.

4. Parent Dependent Requirement: This is a requirement which has been generated through the bill of materials of a product.

5. Forecasts: This is used to plan purchase and production in advance before real sales orders are received.

6. Dead Periods: This is the period in the MRP report where if a requirement exists, timely procurement is not possible because of long lead time. It is depicted by dark gray cells.

7. Planning Horizon: This is the time defined for the MRP Run

8. Procurement Method: This is used to define an item as a produced item or purchased item. - (Make or Buy)

9. Order Recomendation Report: The Order Recommendation Report displays the list of all MRP recommendations according to the defined selection criteria.

10.Pegging Information: This shows the source of receipts and gross requirements for an item during a defined period.