In MRP, which term represents the quantity that must be produced or procured to meet demand after subtracting on-hand inventory and scheduled receipts from gross requirements?

In MRP, which term represents the quantity that must be produced or procured to meet demand after subtracting on-hand inventory and scheduled receipts from gross requirements?

• A. Time bucket
• B. Scheduled receipt
• C. Net requirement
• D. Projected on-hand inventory

Answer: (C)

Net requirement represents the quantity that must be produced or procured in a given period after accounting for what you already have on hand and what is scheduled to arrive. In MRP, you start with gross requirements—the demand for the period from the master schedule and bill of materials. You then reduce that by on-hand inventory, which is what you already possess, and by scheduled receipts, which are orders that have been placed and are due to arrive. The result is the net quantity you actually need to plan for in that period. If this net comes out negative, it means you have more than enough stock or incoming orders, so no production or procurement is needed. This net figure drives the planned-order releases that activate purchasing or production to satisfy demand. For context, time bucket refers to the planning interval itself, and projected on-hand is the expected inventory level after considering inputs but before deciding what to produce; neither is the quantity you must produce to meet demand—the net requirement is.