MRP (Materials Requirements Planning) is a production planning and inventory control system used to manage procurement and production schedules. It calculates net material requirements based on production schedules, available inventory, and lead times. MRP breaks down finished goods into their component parts and materials, then determines timing for procurement and production of each item based on quantity and date needed. Conducting MRP calculations individually for each component can result in excess orders, while aggregating requirements across all products leads to more efficient scheduling.