Replenishment, setting up for MRP

We are getting to the stage we want to set up our system to run MRP and work off the min/max, safety stock setup.

I believe I read somewhere, although I can not find it now, That MRP uses safety stock level along with the EOQ of the active and standard routing to determine when and how many manufactured parts to make.

Also the Min/max level is used for the purchase parts to produce POs.

Could anyone clarify this for us.

We do not want to go to the whole formula section yet, we are trying to keep it simple for training concerns.

I want to thank anyone for there guidance and comments for us.

Update 2-26-15:

Mr Mallory's material was helpful and really gave us insight into the setup.

But for some reason I am still not getting the desired results, and I am not sure I can?

I have set the Safety Stock for a manufactured part to 250 Pieces.

My reorder method is listed as manual on the replenishment screen in Maintain Inventory.

I have a Batch size of 75 on my routing page.

Apparently EOQ does nothing except for costing.

I have a negative 20 for available stock.

I run MRP and it produces 4 Planned work orders @75 pieces each.

Which only gives me 300-20=280 pieces.

So if I have an order for 35 pieces come in putting me below 250 Safety stock level, I believe it will produce a work order for 75 pieces.

So how do I get it where it will run at least 300 pieces if I go below 250?

And I need to keep my batch (Individual Work Order) quantities at 75!

Please help me be the hero this week!

Thank you all for your Input.