Why are scheduled receipts adjusted before any net requirements are computed?

Scheduled receipts are the incoming orders to replenish materials or parts in a company's inventory, based on the delivery dates committed or planned by suppliers or vendors. These orders are already placed and confirmed, so they are expected to arrive at the specific dates.

Net requirements are the quantity of materials or parts needed to fulfill the production plan for a specific item. It takes into account the available inventory, along with any scheduled receipts or incoming orders, to determine the amount of material needed to meet the production requirements.

Adjusting scheduled receipts before computing net requirements ensures that the current information about the incoming orders is accurately considered in the overall planning process. Common adjustments include rescheduling delivery dates due to supplier delays, changing order quantities based on revised production schedules, or canceling orders altogether. Adjusting scheduled receipts allows the MRP system to have a complete record of the orders that will actually be received, providing a more accurate basis for adjusting production and purchasing plans.

Once scheduled receipts are adjusted, the MRP system can accurately compute net requirements. The process involves: 1. Determining the gross requirements, which is the total amount of material needed to produce the planned items. 2. Accounting for on-hand inventory, which is the quantity of material available in the company's stock. 3. Incorporating adjusted scheduled receipts, ensuring that the updated information about incoming orders is considered. 4. Calculating net requirements by subtracting the available inventory and scheduled receipts from the gross requirements. By adjusting scheduled receipts before computing net requirements, the MRP system can provide a more accurate and efficient production plan, ensuring the right amount of materials are available when needed, reducing excess inventory costs, and minimizing lead times for production.