We are trying to make our MRP as accurate as possible to control  rising inventory costs.  To make sure we understand how it works- what is the relationship among Forecast and Work Orders as they relate to MRP. Do both Drive MRP, do workorders replace the sales forecast or add to the need for  

Thanks- but then how does the forecast affect the other three- does it increase the total demand for parts or do the work orders satisfy the demand from forecast and sales orders?  
 

I think I know what you are struggling with because we deal with a similar issue.  You are sitting on a "good" forecast but also have some orders in your system.  You might think that those "hard" orders should be subtracted from the forcast during MRP.
 
As Lorne said above, they won't be subtracted -  they will just lay on top of the forecast.  So if you have forecasted selling 1000 of Item #1234 in your forecast period but a customer has already placed on order for 500 that you haven't shipped yet, MRP will be driven by 1500 pieces and you will probably over-order components.
 
When we run our first pass on MRP, we drive it by forecast only and ignore sales orders, so we are assuming our forecast is accurate.  We review open orders and tweak our forecast accordingly.
 
 

I will try that out.