"When to order" is considered as a major problem of inventory management, however, the really important question is "when to need materials". Order Point Method (OPM) is to determine order time by triggering order point and determine request date by the lead time, which is in fact putting the cart before the horse. MRP (Material Requirements Planning) was proposed on the basis of filling the gap of Order Point Method.

 MRP is to determine the order and production according to materials types, numbers and inventory made by Master Schedule Planning (also called MRP). Therefore, MRP is a method which measures future material supply, production and control according to real demands, MRP provides the exact time and quantity of material requirements.

 There are three differences between MRP and OPM:

(1) Requirements of all the materials are linked together by product structure.

MRP focuses on reasonable inventory quantity by considering relationship between different materials requirements.

(2) Material requirement is divided into independent requirement and relevant requirement.

If a material’s requirement does not depend on the requirements of other materials, it can be called independent requirement, such as, raw materials, parts and components. If a material’s requirement depends on the requirements of other materials, it can be called relevant requirement, such as, final product and maintenance parts. Independent requirement usually demands on forecast, customer orders and other external factors, while relevant requirement is determined by the MRP system.

(3) The concept of time slicing is introduced to the inventory status data of materials.

Time slicing is to add coordinate into the material’s inventory status data, that is, inventory status data will be recorded and stored by a specific date or plan. This helps accurately answer any time-related problem.

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