Phantom assemblies are used in MRP to group components without creating separate production orders. When implemented, MRP treats the components as part of the parent item, allowing a reduction in production orders. This is ideal for lean operations seeking streamlined processing without losing visibility of component requirements.

“Phantom assemblies… are used when components are assembled directly into the parent product… MRP does not generate production orders for phantom items, thus reducing total production orders.”

— Source: MRP Module – C1-19; CPIM Study Guide