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Qwestrum Engineering360 · Industrial & Production · Production Planning & Control

MRP and Capacity Planning

MRP converts master schedule into time-phased component orders and checks capacity feasibility.
Exam tip: keep SI units consistent end-to-end, write the governing relation symbolically before substituting, and sanity-check magnitude and sign.

Key formulas & points

Skim these first — then read the full notes below.

  • BOM explosion drives dependent demand
  • MPS master schedule for end items
  • RCCP rough-cut capacity check on MPS

Topic details

Introduction

Groover and Chase both present MRP as a logic engine: right part, right quantity, right time. Capacity planning prevents computationally feasible plans from becoming shop-floor impossible.

Key relations & formulas

Formulas (Indian textbook notation)

  • netrequirement=gross−onhand−scheduledreceiptsnet requirement = gross - on hand - scheduled receipts

Formulas (Indian textbook notation)

  • plannedorderrelease=netreqoffsetbyleadtimeplanned order release = net req offset by lead time

Formulas (Indian textbook notation)

  • capacityload=Σ(setup+runtime)perworkcentrecapacity load = Σ (setup + run time) per work centre

Notation and sign conventions

Relation 1 —
netrequirement=gross−onhand−scheduledreceiptsnet requirement = gross - on hand - scheduled receipts

Formulas (Indian textbook notation)

  • netrequirement=gross−onhand−scheduledreceiptsnet requirement = gross - on hand - scheduled receipts
Write this relation with symbols exactly as in Martand Telsang Ppc — Standard reference before substituting numbers. Examiners award partial marks for a correct setup even when arithmetic slips.
Relation 2 —
plannedorderrelease=netreqoffsetbyleadtimeplanned order release = net req offset by lead time

Formulas (Indian textbook notation)

  • plannedorderrelease=netreqoffsetbyleadtimeplanned order release = net req offset by lead time
Write this relation with symbols exactly as in Martand Telsang Ppc — Standard reference before substituting numbers. Examiners award partial marks for a correct setup even when arithmetic slips.
Relation 3 —
capacityload=Σcapacity load = Σ

Formulas (Indian textbook notation)

  • capacityload=Σ(setup+runtime)perworkcentrecapacity load = Σ (setup + run time) per work centre
Write this relation with symbols exactly as in Martand Telsang Ppc — Standard reference before substituting numbers. Examiners award partial marks for a correct setup even when arithmetic slips.

Concept in depth

The MPS drives BOM explosion to generate gross requirements at each level. Inventory records and scheduled receipts produce net requirements, then planned order releases are time-shifted by lead times. RCCP and CRP verify whether work centers can execute the plan.

Assumptions and validity limits

State assumptions explicitly before using any relation for mrp and capacity planning — steady state, uniform properties, linear elastic material, ideal gas, incompressible flow, etc., as applicable.
Wrong assumptions invalidate the entire solution even when the formula is correct. In Production Planning viva and GATE descriptive questions, listing valid assumptions often earns separate marks.

Step-by-step problem approach

1. Read the question and list given data with SI units (common in Production Planning papers).
2. Draw a neat labelled diagram where applicable — examiners in Indian universities award diagram marks even when arithmetic slips.
3. Identify which relation from this topic applies to mrp and capacity planning.
4. Use equation 1:
netrequirement=gross−onhand−scheduledreceiptsnet requirement = gross - on hand - scheduled receipts
.
5. Use equation 2:
plannedorderrelease=netreqoffsetbyleadtimeplanned order release = net req offset by lead time
.
6. Substitute values, compute, and verify units and sign (direction).
7. State conclusion in one line — e.g. safe/unsafe, stable/unstable, feasible/infeasible.

Applications & exam relevance

MRP and Capacity Planning appears in manufacturing plants. In Indian industrial curricula this topic is tested because it connects theory to MRP, scheduling, and capacity.
GATE and semester exams often combine mrp and capacity planning with earlier units — revise prerequisites before attempting mixed problems.
Industry interview panels sometimes ask: "Where did you use mrp and capacity planning?" — answer with a lab, mini-project, or plant visit example if possible.

Common mistakes in exams

Students frequently ignore lot-sizing rules and release orders in need week instead of lead-time-offset week. Another common error is sign mistakes in net requirement calculation.

Quick revision checklist

Before attempting mrp and capacity planning problems, confirm you can:
1. BOM explosion drives dependent demand
2. MPS master schedule for end items
3. RCCP rough-cut capacity check on MPS
Revise the solved examples in Martand Telsang Ppc — Standard reference and one previous-year GATE or university paper for this unit.

Worked examples

Try the problem first — open the solution when you are ready to check.

Net requirement computation

Problem

For week 5, gross requirement is 300, on-hand is 70, scheduled receipt is 80. Find net requirement.

Solution

Net requirement = 300 - 70 - 80 = 150 units. If lead time is 2 weeks, planned order release must be in week 3.

Conceptual check — MRP and Capacity Planning

Problem

In a Production Planning semester or GATE paper you are asked: "State the main assumption, the governing relation, and one practical consequence of mrp and capacity planning." What should a complete answer include?

📖 Standard books (India)

  • Martand Telsang Ppc — Standard reference

    Read: Syllabus unit

    Referenced in Indian B.Tech syllabus

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