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• The MRP 1 view defi nes the overall planning strategy used for the
material and determines how much material the company should
procure.

• The MRP 2 view identifi es the times the system can use for sched-
uling and conveys data that the system uses to determine how to
procure materials (make vs. buy).
• The MRP 3 view identifi es the strategy the system will use to cal-
culate how much material is available, and it determines how the
material will be produced.
• The MRP 4 view contains data that the system uses to select the
correct BOM.
The work scheduling view contains data that determine production time
such as setup, teardown, and processing time. We discussed these times in
Chapter 6 in the context of work centers.
The next section provides a detailed discussion of the key data included
in the MRP and work scheduling views of the material master.

Procurement Type
The outcome of the material planning process is one or more procurement
proposals, which can trigger either the production or the procurement process.
The procurement type indicates whether a material is produced in-house or
internally (via the production process), obtained externally (via the procure-
ment process), both, or none. Trading goods and raw materials are typically pur-
chased from vendors. Consequently, the procurement type for such materials
is specifi ed as external. In contrast, fi nished goods and semifi nished goods are
typically produced in house. As a result, the procurement type for these types
of materials is typically in-house production. Occasionally, however, when a
company does not have the material or other resources to produce materials
in house, it purchases them externally. In such cases, the procurement type is
set to both. Procurement type none is appropriate for discontinued materials.
At GBI, the procurement type is defi ned as both for fi nished goods,
as external for trading goods and raw materials, and as in-house for semi-
fi nished goods.

MRP Type
MRP type specifi es the production control technique used in planning.
Common production control techniques are consumption-based planning,
2
materials requirement planning (MRP), and master production scheduling
(MPS). MRP type can also be set to “no planning,” in which case the material
is not included in the planning process.
Consumption-based planning calculates the requirements for a mate-
rial based on historical consumption data. It manipulates these data to project

2 The term materials requirement planning refers to both a planning technique and a step in the
material planning process.

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