MRP Calculations

The core of the MRP Tools is a background process that calculates the material plan. This process runs asynchronously and populates the MRP Entry table, which serves as the data source for the MRP Workbench. The calculation is designed to be idempotent, meaning it clears all previous data before generating the new plan to ensure accuracy.

1. MRP Settings

The calculation is executed in several distinct stages:

2. Item and Period Scaffolding

First, the system creates a planning scaffold for all relevant items over the defined time horizon.

• BOM Level Calculation: The process starts by calculating the Bill of Materials (BOM) level for every stock item. It uses a recursive SQL query to determine the deepest level an item appears in any default, active BOM. Top-level items are at level 0.
• Time Horizon Generation: Based on the "Look Ahead" setting in MRP Settings, the system generates a series of weekly periods (e.g., 2026-W40, 2026-W41, etc.).
• MRP Entry Creation: An MRP Entry record is created for each item for each week in the look-ahead period. This creates the grid of data that will be populated in the subsequent steps.

3. Demand Calculation

Next, the system calculates all sources of demand.

• Open Orders Demand:
  • Reserved Qty: Calculates demand from open Sales Orders.
  • Reserved Qty for Production: Calculates demand for raw materials from open Work Orders.
  • Upstream Sales Order Demand: Explodes the demand from Sales Orders down through the BOMs to calculate requirements for sub-assemblies and components.
• Forecast Demand:
  • Forecast Demand: Calculates demand from the MRP Forecast doctype for top-level items.
  • Upstream Forecast Demand: Explodes the forecast demand down through the BOMs to calculate requirements for sub-assemblies and components.

4. Scheduled Receipts Calculation

The system then calculates all sources of future supply.

• Planned Qty: Calculates scheduled receipts from open Work Orders for manufactured items.
• Ordered Qty: Calculates scheduled receipts from open Purchase Orders for purchased items.

5. Totals and Projections

Finally, the system calculates the net position and suggests actions.

• Totals Calculation: The various demand and supply fields are summed into total fields like Open Orders, Total Forecast Demand, and Scheduled Receipts.
• Suggestions and Projected Stock: This is the core MRP logic. For each item, the calculation proceeds chronologically, week by week:
  1. Beginning Inventory: The On Hand Inventory for the first period is the current actual stock level. For all subsequent periods, it is the Projected On Hand Inventory from the previous period.
  2. Net Requirements: The system calculates the total demand for the period based on the "Requirement based on" setting (e.g., Forecast only, Open Orders + Forecast, etc.).
  3. Shortage Calculation: It determines if there is a shortage by comparing the on-hand inventory and scheduled receipts against the total demand and the item's re-order level.
  4. Suggested Receipts: If a shortage exists, the system calculates a Suggested Receipt. This value considers the shortage quantity and the item's re-order quantity (MOQ).
  5. Projected Inventory: It calculates the Projected On Hand Inventory at the end of the period.
  6. Suggested Orders: The Suggested Receipt is offset by the item's lead time to generate a Suggested Order in the appropriate earlier time bucket. For example, if an item has a 2-week lead time, a suggested receipt in Week 42 will generate a suggested order in Week 40.
  7. Urgency Flag: If a suggested order is calculated for a period that is already in the past, the item is flagged as Urgent.

MRP Entry Fields

The following are the key fields calculated for each item in each period:

Field	Description
Item Details
item_code	The item being planned.
bom_level	The calculated BOM level of the item.
target_date	The target date for the planning period (week).
reorder_level	The minimum stock level for the item.
reorder_quantity	The minimum order quantity (MOQ) for the item.
lead_time	The lead time (in days) for procuring or manufacturing the item.
is_urgent	A flag indicating if an order for this item is past its required start date.
Inventory & Demand
on_hand_inventory	The stock on hand at the beginning of the period.
open_orders	Total demand from firm orders (Sales Orders and Work Orders).
total_forecast_demand	Total demand from forecasts, including exploded demand for components.
Supply
scheduled_receipts	Total expected supply from open Work Orders and Purchase Orders.
Calculations & Projections
suggested_receipts	The quantity the MRP calculation suggests should be received in this period to avoid a shortage.
suggested_orders	The quantity that should be ordered, offset by lead time. This is the primary action field.
projected_on_hand_inventory	The projected stock on hand at the end of the period after considering all demand, supply, and suggested receipts.