This thesis studies the order release scheduling by lead time offsetting technique in MRP system. MRP is the process of working backward from the scheduled completion dates of end products or major assemblies to determine the dates and quantities when the various component parts and materials are to be ordered. It aims getting the right quantity of component parts to the right places at the right time with a schedule that puts each parts or subassembly into stock shortly ahead of the need for that parts or subassembly. The planned order release point of a item can be easily decided when the scheduled completion date and planned lead time is certain and known before by lead time offsetting technique in MRP system.