Q.  Does MRP Consider Inventory Allocations?

A.  Inventory Allocations are not a factor in MRP demands, because it could result in excess inventory. 

For example, if 100 parts are allocated to a WO due in October.  Meanwhile another demand for the same part comes in with an earlier required due date such as July.  If we honored allocations, then MRP would recommend a new PO for the July demand even though there is sufficient parts already on hand.  This would tie up capital in excess inventory.

Right now MRP would use the inventory for the earliest demand and would recommend a new PO for the later demand.