How do you calculate net material requirement?

Subtract all available supply from gross demand: net requirement = gross requirement - on-hand inventory - open receipts - reserved/substitute supply. With a gross of 1,250 units, 420 on hand, 300 on open receipts and 80 reserved, the net is 450 units to procure or build.

What is the difference between gross and net requirements?

Gross requirement is total demand for the part regardless of what you already have. Net requirement is what is left after you apply on-hand inventory and scheduled receipts. In the example, gross is 1,250 but net is only 450 because 800 units of usable supply already cover the rest.

Why does my MRP keep ordering material I already have?

Usually because open PO and work-order receipts are not flowing into the netting logic, or inventory records are inaccurate. If you exclude the 300 units of open receipts and 80 reserved here, net jumps from 450 to 830 — an over-order of 380 units.

Should safety stock be included in this calculation?

Not in the basic netting shown here. Safety stock is typically added to the gross requirement (or netted against on-hand separately) so the part nets to zero only when you are above your buffer. This calculator gives the raw net before any safety-stock policy is applied.

What does supply coverage of gross requirement mean?

It is total usable supply divided by gross requirement, expressed as a percentage. Here 800 usable units against a 1,250 gross requirement gives 36% coverage, meaning existing supply only covers about a third of demand and you must source the remaining 450 units.

What is a good net material requirement?

There is no universally good value — a net of zero means existing supply covers demand and no order is needed, while a positive net is the exact quantity to release. The goal is accuracy, not minimizing the number; a net that is too low signals a future stockout.

ERP & MRP Planning calculator

MRP Material Requirements Calculator

Net material requirement is the quantity of a part you must actually buy or build after subtracting everything already in the pipeline from gross demand. It is the core netting calculation inside any MRP run and drives every planned order the system generates. Material planners and buyers use it to avoid double-ordering against POs that are already open and to release purchasing on time. Getting netting wrong is the single most common cause of either stockouts on a line or carrying excess inventory you paid for twice.

What this calculator does

Calculate net material requirements from gross demand, on-hand inventory, scheduled receipts, and other usable supply.
an MRP planner needs to decide how many components or finished units still need planned supply
It computes the net new quantity to procure or produce by subtracting on-hand inventory, open receipts, and reserved or substitute supply from the gross requirement.

Formula used

Net material requirement = gross material requirement - available on-hand inventory - open receipts - approved substitute or reserved supply
Total usable supply = available on-hand inventory + open receipts + approved substitute or reserved supply

Inputs explained

Gross material requirement:
Available on-hand inventory:
Open PO or work-order receipts:
Approved substitute or reserved supply:

How to use the result

Use it whenever you net a part during MRP planning, before releasing a planned purchase order or work order, or when validating what an ERP run actually proposed.
It is a single-bucket netting snapshot — it ignores lead-time offsets, lot-sizing rules, safety stock, and time-phasing, so a part that nets to zero today may still be short in a future period.

Current U.S. benchmarks

Manufacturing hourly earnings average $30.27 (BLS, Jun 2026), up 4.4% from a year earlier. Median machinist pay is $28.24/hr (OEWS 2025), with state medians on each state page. Manufacturers have 529k open positions nationally (BLS JOLTS).
U.S. manufacturing runs at 75.6% of capacity (Federal Reserve, May 2026). New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate net material requirement? Subtract all available supply from gross demand: net requirement = gross requirement - on-hand inventory - open receipts - reserved/substitute supply. With a gross of 1,250 units, 420 on hand, 300 on open receipts and 80 reserved, the net is 450 units to procure or build.
What is the difference between gross and net requirements? Gross requirement is total demand for the part regardless of what you already have. Net requirement is what is left after you apply on-hand inventory and scheduled receipts. In the example, gross is 1,250 but net is only 450 because 800 units of usable supply already cover the rest.
Why does my MRP keep ordering material I already have? Usually because open PO and work-order receipts are not flowing into the netting logic, or inventory records are inaccurate. If you exclude the 300 units of open receipts and 80 reserved here, net jumps from 450 to 830 — an over-order of 380 units.
Should safety stock be included in this calculation? Not in the basic netting shown here. Safety stock is typically added to the gross requirement (or netted against on-hand separately) so the part nets to zero only when you are above your buffer. This calculator gives the raw net before any safety-stock policy is applied.
What does supply coverage of gross requirement mean? It is total usable supply divided by gross requirement, expressed as a percentage. Here 800 usable units against a 1,250 gross requirement gives 36% coverage, meaning existing supply only covers about a third of demand and you must source the remaining 450 units.

Last reviewed 2026-05-12.