In a lean environment, one uses material requirements planning (MRP) processing primarily to

create plans to share with suppliers. MRP is a software-based system that calculates the quantity and

timing of materials needed for production, based on the master production schedule, the bill of

materials, and the inventory status. MRP helps to coordinate the flow of materials from suppliers to

the production process, reducing waste and inventory costs. MRP can also generate purchase orders,

work orders, and other documents to communicate the plans with suppliers and internal

departments. MRP does not calculate average daily demand, which is a measure of the average

amount of a product or service that is sold or consumed per day. MRP does not determine the

kanban circuit locations, which are the physical places where kanban cards or containers are

exchanged between processes in a pull system. MRP does not determine where to use

supermarkets, which are locations where a small amount of inventory is kept to buffer against

fluctuations in demand or supply. Reference: CPIM Exam Content Manual Version 7.0, Domain 4:

Plan and Manage Supply, Section 4.1: Supply Planning Concepts, p. 24; Lean MRP; Manufacturing

resource planning.