MRP Inputs and Outputs: The Complete Breakdown for Manufacturers

Understanding MRP inputs and outputs is fundamental to making any material requirements planning system work effectively. MRP is not magic. It is a structured calculation engine that takes specific inputs, processes them through well-defined logic, and produces actionable outputs. If the inputs are accurate, the outputs are reliable. If the inputs are garbage, MRP will dutifully calculate garbage results with mathematical precision.

In this guide, we break down every input and output of the MRP system so you know exactly what feeds the engine and what it produces. For the broader context, see our complete MRP guide.

The Three Essential MRP Inputs

Every MRP system, whether it is a module within SAP or a focused tool like RMDB from User Solutions, requires three core inputs to function.

Input 1: Master Production Schedule (MPS)

The Master Production Schedule is the driving force behind MRP. It specifies:

• What finished goods to produce
• How many of each to produce
• When they need to be completed

The MPS translates customer orders and demand forecasts into a time-phased production plan. It operates at the finished goods level, typically in weekly or daily buckets.

Example MPS:

The MPS must be realistic. If it calls for more production than your capacity allows, MRP will generate material requirements for a plan you cannot execute. This is why pairing MRP with finite capacity scheduling is critical. Tools like RMDB validate the MPS against actual capacity before MRP runs, ensuring material plans are tied to feasible production schedules.

Input 2: Bill of Materials (BOM)

The Bill of Materials defines the product structure: every component, sub-assembly, and raw material needed to produce one unit of a finished good. The BOM provides the recipe MRP uses to "explode" finished goods demand into component requirements.

A multi-level BOM shows parent-child relationships across multiple assembly levels:

Level 0: Finished Product A
  Level 1: Sub-Assembly X (qty: 2)
    Level 2: Component P (qty: 3)
    Level 2: Component Q (qty: 1)
  Level 1: Sub-Assembly Y (qty: 1)
    Level 2: Component R (qty: 4)
    Level 2: Component P (qty: 2)
  Level 1: Raw Material Z (qty: 5)

Notice that Component P appears at two different points in the BOM. MRP uses low-level coding to ensure it calculates requirements for Component P only after all parent demand has been determined, combining the needs from both Sub-Assembly X and Sub-Assembly Y.

BOM Accuracy Target: 98%+. Even a 2% error rate in BOMs cascades across hundreds of components and thousands of planned orders.

Input 3: Inventory Status Records

Inventory status records tell MRP what materials are currently available. For each item, MRP needs:

Inventory Accuracy Target: 95%+. This is the input most manufacturers struggle with. Implementing cycle counting, where you count a portion of inventory daily, is the most effective way to maintain accuracy.

Supporting Inputs

Beyond the three core inputs, MRP systems also use:

• Item master data: Part numbers, descriptions, unit of measure, ABC classification
• Supplier data: Preferred vendors, lead times, minimum order quantities
• Routing data: Manufacturing operations, work center assignments, run times
• Planning parameters: Planning horizon, time fences, safety stock levels

The MRP Calculation Engine

With all inputs loaded, MRP executes a systematic calculation. The process follows this sequence:

1. Explode the MPS through the BOM to determine gross requirements for every component at every level.

2. Net against available inventory using the net requirements calculation:

Net Requirements = Gross Requirements - Scheduled Receipts - On-Hand + Safety Stock

3. Apply lot sizing rules to determine order quantities. Options include lot-for-lot, economic order quantity (EOQ), fixed order quantity, and period order quantity.

4. Offset by lead time to determine when orders must be placed (planned order releases) versus when they need to arrive (planned order receipts).

5. Repeat for each BOM level, working from top (finished goods) to bottom (raw materials), using low-level codes to ensure all demand is captured before calculating net requirements.

The Six Key MRP Outputs

Output 1: Planned Order Releases

The primary output of MRP. These are recommendations for new purchase orders and production orders, specifying:

• What item to order
• How many to order
• When to place the order

Planned orders are suggestions, not committed orders. A planner reviews and approves them before they become firm purchase orders or production orders.

Output 2: Order Rescheduling Notices

When demand or supply changes, MRP generates reschedule notices telling planners to move existing orders earlier or later. These are critical for keeping the plan aligned with current reality.

Reschedule-in notices (expedite) mean demand has increased or moved earlier. Reschedule-out notices (defer) mean demand has decreased or moved later. Managing these action messages effectively is key to avoiding MRP nervousness.

Output 3: Cancellation Notices

When MRP determines that an open order is no longer needed, it generates a cancellation notice. This happens when demand decreases, orders are canceled, or inventory levels are higher than expected.

Output 4: Exception Reports

Exception reports flag items that require planner attention because MRP cannot resolve them automatically:

Output 5: Material Shortage Reports

These reports identify items where projected available inventory drops below zero (or below safety stock) within the planning horizon. They help buyers prioritize procurement actions and give production planners early warning of potential disruptions.

Output 6: Performance Reports

MRP systems generate reports on planning effectiveness:

• Schedule adherence (planned vs. actual)
• Inventory turns
• Stockout frequency
• Order fill rate
• Purchasing integration metrics

Input-Output Summary Table

Getting Your Inputs Right: Practical Advice

The most common reason MRP implementations fail is not the software. It is the data. Here is how to ensure your inputs support reliable outputs:

1. Conduct a BOM audit. Walk through your top 20 products and verify every component, quantity, and level against actual production builds. Fix discrepancies before going live.

2. Implement cycle counting. Count a portion of your inventory every day. Within 90 days, you will have counted everything at least once and established an accuracy baseline.

3. Validate lead times. Compare your system lead times against actual supplier performance over the last 6 months. Lead times that were accurate two years ago may be wildly wrong today.

4. Start with realistic MPS. Use a finite capacity scheduling tool to validate your master schedule against actual capacity before feeding it to MRP. RMDB does this automatically.

5. Define appropriate safety stock. Use statistical methods rather than gut feel. See our guide on safety stock in MRP for formulas and best practices.

Frequently Asked Questions

Build Your MRP Foundation Right

Getting MRP inputs right is the single biggest factor in planning success. RMDB from User Solutions helps manufacturers combine accurate material planning with finite capacity scheduling, ensuring that your material plans are driven by feasible production schedules.

Schedule a free demo to see how RMDB handles MRP inputs and outputs for your manufacturing operation.