Important Factors Affecting MRP:

Other factors that are commonly utilized in MRP applications are batch size, and safety stock.

Batch Size (BS)

The operation of an MRP process results in the purchase and/or manufacture of items in the quantities required when they are required. But this takes no account of the have to purchase and manufacture economic batch sizes, which balance ordering or set-up costs against the holding costs. If these economies are to be attained, the MRP procedure must accommodate an economic batching procedure. One method of achieving this is to issue an order, whether a purchase or a manufacturing order, for a fixed quantity of an item whenever there is a need for that item. Items surplus to requirements are then placed in stock, and when at a later date the item is needed again, stock is depleted or a further economic batch quantity is manufactured. Actually, the need for inventories of items over a period of time results mostly from the need to manufacture items in economic batches unless there are safety stock considerations at these levels.