MRP Planning Policies and Quantities

Overview
This article describes the types of Planning Policies used in MRP that are set against the Inventory Commodity Code and Inventory Item Master records.

MRP Plan Policy
The MRP Plan Policy indicates the method MRP Planning will use in generating the material plan.

• Days Cover = MRP Planning will combine demand quantities across the number of days specified, to create a single planned supply order as part of the plan.
• Lot for Lot = For each demand MRP Planning will create a planned supply order as part of the material plan. The MRP Planned Order Quantity will be determined based on net demand and the Minimum Order Quantity and Safety Stock Quantity.
• No MRP Planning = MRP Planning ignores this item from an analysis standpoint.
• Re-order Point = MRP Planning will create a single planned supply order, with the order quantity specified, Demand is ignored.

MRP Quantity Policy
The MRP Quantity Policy values work in conjunction with certain MRP Plan Policies. The quantities established here will determine the planned supply order quantity created by MRP Planning.

• Days Cover: The value entered here represents the number of days into the future from first uncovered demand to determine the MRP planned supply order.
• Lot for Lot: Defaults to 1 and cannot be changed.  Indicates that MRP Planning will create a planned supply order to exactly meet demand.
• No MRP Planning: Excluded from MRP planning.  The demand is calculated however no supply order is planned.
• Re-Order Point: Under Re-order Point, the MRP Quantity Policy value represents a fixed quantity for MRP Planned supply orders. Use the Safety Stock field to set the Minimum Inventory level for the item and use MRP Policy Quantity to specify the MRP Planned Order quantity. One single supply order, for the quantity specified, will be planned, regardless of any existing demand.

Order Policy Quantities

• Minimum Quantity: This value is the minimum quantity for which MRP will plan an order. If the value is set to 10 and the demand is for 4, the MRP Planned Order will be for the minimum quantity or 10.  When the demand is greater than the Minimum Quantity, the actual demand quantity is planned.
• Maximum Quantity: This value represents the maximum quantity MRP will calculate to order.  MRP will plan supply orders to cover total demand, with this quantity as the maximum per supply order.
• Supply Multiplier: This value represents a multiplier used on supplies (Work Orders and Inventory Requisitions) created by MRP. Just prior to creation supplies are adjusted up, as necessary, to be a multiple of this value. This adjustment does not affect MRP calculations, and will not affect the number of planned Work Order / Inventory Requisitions that are created from MRP.
• Safety Stock Quantity: MRP planning will plan an order to bring the level of inventory up to the Safety Stock Quantity, in addition to covering outstanding demand quantities.
• Yield: This field is included in the MRP calculation to adjust the MRP planned quantity by anticipated Yield Loss of this item during the manufacturing process. Values of zero as well as a value of 1.0 indicate that there is no Yield factor to be applied.

SEE ALSO