What is the different between gross material requirements plan (gross MRP) and a net material requirements plan (net MRP)?

What is the different between gross material requirements plan (gross MRP) and a net material requirements plan (net MRP)?
A . The gross requirement doesn’t take taxes into account, whereas the net requirement includes the tax considerations
B. The gross MRP includes consideration of available inventory, whereas the net MRP does not
C. The net MRP includes the amount of inventory on hand, whereas the gross MRP does not
D. The gross MRP is mostly paper-based, but the net MRP must be computerised

View Answer

Answer: B

Explanation:

Material requirement planning (MRP) is a production planning and material (inventory) control system used in manufacturing. Objectives of MRP are to ensure materials are available for production while minimising inventory and to plan production and procurement activities.

MRP software combines the master production schedule, the bill of materials and the inventory information to work out the net requirements (net MRP) of what to purchase or produce and when. These net requirements are worked out using the following equation: Net requirements = Total requirements – Available inventory

Where:

Total requirement = Gross requirements (gross MRP) Available inventory = Inventory on hand + Units on order

In the other words, Gross MRP = Net MRP + Available inventory, so the answer should be "The gross

MRP includes consideration of available inventory, whereas the net MRP does not"

LO 2, AC 2.3