Final answer:
The statement is false; lot size calculation in MRP is about determining 'how much' to order or produce rather than 'whether' there is a need to procure material. It involves optimizing inventory and production quantities based on several factors to meet demand efficiently.
Step-by-step explanation:
The lot size calculation step in Material Requirements Planning (MRP) is false for the assertion that it is used to determine whether there is a need to procure the material. In reality, the primary function of lot sizing is to determine how much of a material should be ordered or produced, not whether it is needed in the first place.
Lot size calculation considers factors such as economic order quantity (EOQ), minimum order quantities, safety stock levels, and production or purchasing lead times to efficiently balance inventory holding costs against order costs. The need to procure or produce the material is determined during the demand planning phase, which comes before lot sizing. After identifying the need, MRP uses lot sizing techniques to optimize the quantities while aiming to satisfy demand efficiently and cost-effectively.